The fact is most banks are still doing fine. Even the mega banks, which isn't something I'm particularly happy with, but nevertheless they seem to be recovering nicely. However, there are still about 300 to 600 that are facing some serious problems. Those range from small society banks to large regional banks. The Fdic has already ended 38 banks this year, they ended seven last week. They expect to close more this year than last year.
That is a lot of potential failures. What can you do to protect yourself? First, as long as your deposits aren't greater than 0,000 (some accounts such as Iras, Joint Accounts, and some others are insured separately), if a bank closes you will get your funds back. Generally, deposits are returned within 7 to 10 days. But, if you have longer-term Cds paying good rates, there is interest rate risk. The 5-year at 5.50% that you opened 3-years ago could be ended and your ready rates to re-invest at this time are much lower.
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Even though the Fdic is facing huge losses, you don't need to worry about not getting your insured funds back. They assessed the banks with a 3-year assurance selected to give them some cushion as they go through 2010, they began to asses brokered deposits, and will do what they need to make sure you are covered. They can even get a loan from the Treasury if needed.
