You have savings accounts at two separately FDIC insured banks. At one of the banks your account has a balance of $200,000. At the other bank the account balance is $60,000. You find out the banks are going to merge. If you are concerned about the possibility of the new bank failing, you should:
A) do nothing; you are still insured up $250,000 per account.
B) consider moving $10,000 to another account at the same bank.
C) consider moving $10,000 to another account at a different bank.
D) do nothing; as an individual you are only insured up $250,000 no matter where the accounts are.

Question

Quizplus · Accepted Answer

While it's true that FDIC insurance covers up to $250,000 per account, it's important to remember that this limit applies per institution, not per account. Because the two banks are merging, your total balance will exceed the insurance limit if they continue to be held in separate accounts. Moving $10,000 to a different bank will ensure that all of your deposits remain fully insured. Moving $10,000 to another account at the same bank is not a good choice because it still leaves all of your money in one institution, and doesn't provide any additional insurance coverage.

You Have Savings Accounts at Two Separately FDIC Insured Banks