Banks are failing in the US at a slow but steady pace rather than a crisis pace: five closures in 2023, two in 2024, two in 2025, and two more in January 2026 alone, according to the FDIC’s official list.1FDIC.gov. Bank Failures The Deposit Insurance Fund held $153.9 billion at the end of 2025, and 60 banks sat on the FDIC’s Problem Bank List, a figure that points to scattered pockets of stress rather than a broken system.2FDIC.gov. FDIC Quarterly Banking Profile Fourth Quarter 2025 For most depositors, federal insurance protects up to $250,000 per person, per bank, per ownership category, and the resolution process is built to keep your money accessible within days.
How Many Banks Have Actually Failed
The year that shook confidence was 2023. Silicon Valley Bank and Signature Bank collapsed in March, and First Republic Bank followed in May.1FDIC.gov. Bank Failures These were not small community banks. They held tens of billions in assets, and regulators arranged acquisitions within days, in some cases invoking emergency measures to protect even uninsured depositors.
Since then, the numbers have cooled. Two banks failed in 2024: Republic First Bank in Philadelphia, acquired by Fulton Bank, and The First National Bank of Lindsay in Oklahoma, acquired by First Bank & Trust Co.1FDIC.gov. Bank Failures Two more closed in 2025. In January 2026, Metropolitan Capital Bank & Trust of Chicago was shut down, and First Independence Bank assumed its deposits and most of its assets.3FDIC.gov. 2026 in Brief – Bank Failures A second bank also closed that same month.
For context, zero banks failed in 2021 or 2022, and the 2008 financial crisis produced hundreds of closures over several years.1FDIC.gov. Bank Failures The current environment is nowhere near that. The move from zero to a handful per year does say that parts of the industry are under real pressure, especially banks with heavy commercial real estate exposure or concentrated, rate-sensitive deposit bases.
Why the Recent Failures Are Happening
Most bank failures come down to two problems: running out of capital or running out of cash.
Capital problems build up when loans go bad or investment holdings lose value. A bank that loaded up on long-term bonds when rates were low will see those bonds worth far less once rates rise sharply. Equity shrinks on paper, and if the losses are large enough, the bank drops below the minimum capital thresholds regulators require. That is essentially what happened to Silicon Valley Bank, where a massive unrealized loss in the bond portfolio wiped out the capital cushion.
Liquidity problems are more immediate. A bank can hold plenty of assets on paper, such as mortgages, commercial loans, and government securities, and still fail if none of it converts to cash fast enough to meet withdrawal demands. A run, where large numbers of customers pull funds at once, can push even a solvent institution into failure. When a bank cannot meet withdrawals, the chartering authority will close it regardless of what the balance sheet says.
Commercial real estate is the sector regulators watch most closely. The Federal Reserve’s proposed 2026 stress test scenarios model a 40 percent decline in commercial real estate prices under a severely adverse scenario.4Federal Reserve. Proposed 2026 Stress Test Scenarios Banks with concentrated CRE lending are the ones most likely to draw supervisory attention.
Is Your Money Safe if a Bank Fails
For most people, yes. The standard federal deposit insurance amount is $250,000 per depositor, per insured bank, for each ownership category, and the coverage is backed by the full faith and credit of the United States government.5eCFR. 12 CFR Part 330 – Deposit Insurance Coverage Insurance covers checking accounts, savings accounts, money market deposit accounts, and certificates of deposit, along with any interest accrued through the date the bank closes.6FDIC.gov. When a Bank Fails – Facts for Depositors, Creditors, and Borrowers
What is not covered: stocks, bonds, mutual funds, annuities, and life insurance policies, even when purchased through a bank employee or a branch. Many banks sell investment products alongside deposit accounts, and it is worth being clear about which of your holdings are actually insured.
Ownership Categories Stack
Insurance limits apply separately to each ownership category at the same bank, which means one person can hold more than $250,000 at a single bank and still be fully covered.
- Single accounts: one person’s deposits in their own name, insured up to $250,000 across all single accounts at that bank.
- Joint accounts: each co-owner’s share of all joint accounts is insured up to $250,000. A couple with a $500,000 joint account is fully covered.
- Retirement accounts: IRAs and certain other retirement accounts are insured separately, up to $250,000.
- Trust accounts: as of April 2024, each owner is insured up to $250,000 per eligible beneficiary named in the trust, with a maximum of $1,250,000 per owner across all trust accounts at that bank. Revocable and irrevocable trust deposits are now combined into a single insurance category.7FDIC.gov. Trust Accounts
A married couple could hold a single account for each spouse, a joint account, and an IRA for each spouse at the same bank, and reach $1,250,000 in coverage before needing a second institution.5eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
What Happens to Your Accounts When Your Bank Closes
Once regulators close a bank, the FDIC steps in as receiver.8Office of the Law Revision Counsel. 12 USC 1821 Insurance Funds What happens next depends on whether another bank agrees to buy the failed institution.
When Another Bank Takes Over
The most common outcome is a Purchase and Assumption transaction, where a healthy bank buys the failed bank’s assets and takes over its deposit accounts. It typically happens over a weekend. You log in Monday morning and everything works the same, just under a different name. Checking balance, direct deposits, automatic payments, and debit card all carry over. The FDIC prefers this approach because it causes the least disruption and costs the insurance fund the least.
When No Buyer Steps In
If no bank wants to acquire the failed institution, the FDIC conducts a deposit payoff. It calculates your insured balance and either mails you a check or sets up an account at another bank for the covered amount. The FDIC’s stated goal is to issue these payments within two business days of closing.9FDIC.gov. Bank Failures – Payment to Depositors Federal law requires payment “as soon as possible,” and in practice most insured depositors get access within a few days.
Your Loans Still Exist
A bank failure does not erase your debts. If you have a mortgage, car loan, or line of credit with the failed bank, you owe the full amount under the same terms. In a Purchase and Assumption deal, the acquiring bank takes over servicing. If no buyer is found, the FDIC temporarily services the loan and then sells it, often within a few months. The sale does not change your loan terms, and the new owner must follow all state and federal lending laws.10FDIC.gov. A Borrowers Guide to an FDIC Insured Bank Failure Keep making regular payments. Missing payments during a transition can still damage your credit.
Safe Deposit Boxes
Safe deposit box contents are not deposits and are not covered by FDIC insurance, but they do not disappear. If another bank acquires the failed institution, your box transfers with it. If not, the FDIC will contact you about retrieving the contents. Unclaimed deposit accounts must be turned over to the state after 18 months under federal law, and state laws set their own timelines for safe deposit box contents.11FDIC.gov. How to Find a Long Lost Bank Account or Safe Deposit Box
What Happens if You Have More Than $250,000
If your balance exceeds $250,000 in a single ownership category at one bank, the amount above the limit is uninsured. That does not automatically mean the money is gone, but recovery is slower and less certain.
In a Purchase and Assumption deal, the acquiring bank sometimes takes on all deposits, insured and uninsured, as part of the purchase terms. When that happens, you lose nothing. In the 2023 closures of Silicon Valley Bank and Signature Bank, regulators invoked a systemic risk exception to protect all depositors regardless of balance. That was an extraordinary measure, not the norm.
In a standard resolution, uninsured depositors receive a receivership certificate representing their claim against the failed bank’s remaining assets. Depositors sit ahead of general creditors in the statutory payment order, which historically means uninsured depositors recover a substantial portion of their excess funds, though not always the full amount and not quickly.12Office of the Law Revision Counsel. 12 US Code 1821 – Insurance Funds The FDIC may issue an advance dividend shortly after closing, returning a portion of uninsured deposits before the full liquidation plays out, with the amount depending on preliminary estimates of asset recovery.13FDIC. Insured Depository Institution Resolutions Handbook Additional dividends come as assets are sold off, which can take months or years.
Credit Unions Work the Same Way
If your money is at a federally insured credit union rather than a bank, the National Credit Union Share Insurance Fund provides coverage that mirrors the FDIC structure. Individual accounts are insured up to $250,000 per member, joint accounts provide $250,000 per co-owner, and IRA and Keogh retirement accounts get a separate $250,000 of coverage.14National Credit Union Administration. Share Insurance Coverage
Trust accounts at credit unions currently follow rules similar to the FDIC’s framework, with coverage of $250,000 per eligible beneficiary. The NCUA approved changes in September 2024 that will combine trust account categories into a single insurance category effective December 1, 2026. For most credit union members with under $1,250,000 in trust deposits, coverage should stay the same under the new rule.15MyCreditUnion.gov. Share Insurance
How to Cover Balances Above $250,000
The simplest strategy is spreading money across multiple FDIC-insured banks. Each separately chartered bank gives you a fresh $250,000 of coverage per ownership category. Deposits at different branches of the same bank do not count separately, because it is the charter that matters, not the location.
Using multiple ownership categories at the same bank is another approach, and the couple example above shows how quickly coverage can multiply without opening accounts elsewhere.5eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
Some banks and brokerage firms offer cash sweep programs that automatically distribute deposits across a network of FDIC-insured banks, keeping each bank’s balance under $250,000. These programs can extend coverage well beyond the standard limit without requiring you to manage multiple bank relationships. The coverage is genuine, because each participating bank provides its own $250,000 of FDIC insurance, but read the terms carefully. The insurance applies only if the underlying FDIC-insured banks fail, not if the brokerage firm or financial technology company managing the sweep shuts down.
How to Check Your Bank’s Financial Health
You do not have to wait for headlines to find out your bank is in trouble. The FDIC and federal banking agencies publish detailed financial data on every insured institution, all free.
BankFind
The FDIC’s BankFind tool lets you confirm that your bank is federally insured, look up its history of mergers or name changes, and access its financial filings. You can search by name or location going back to 1934.16FDIC.gov. FDIC BankFind Suite – Find Insured Banks Start here if you want a quick confirmation that your deposits are actually covered.
Call Reports and Performance Data
Every insured bank is required to file quarterly Call Reports, which disclose income, expenses, assets, liabilities, and loan quality.17eCFR. 12 CFR 304.3 – Reports The Uniform Bank Performance Report summarizes that data and benchmarks a bank against peer institutions of similar size and type. Between the two, you can see how much equity capital a bank holds, how many of its loans are delinquent, and whether its position is improving or deteriorating.
Most depositors will never need to dig into these filings. If your bank starts making news for the wrong reasons, or you are choosing where to park a large sum, a quick look at capital ratios and loan quality trends tells you a lot. A bank consistently above the well-capitalized thresholds with low delinquency rates is in a fundamentally different position from one hovering near regulatory minimums with a growing pile of problem loans.