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The Stunning Truth About the FDIC and Your Bank Deposits

Why you can't rely on the FDIC if another financial crisis hits and your bank goes under

by Bob Stokes
Updated: February 24, 2022

Millions of U.S. bank depositors feel safe in the knowledge that the Federal Deposit Insurance Corporation will protect their accounts, even if their bank goes under.

Yes, it's true that the FDIC says it will do so. As their website states:

The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

However, the question is: Does the FDIC have the wherewithal to fulfill its promise?

In the event of a major financial crisis, the answer is "no." Not even close.

Here's what the Elliott Wave Theorist said in August 2008, near the middle of the 2007-2009 financial crisis:

The FDIC is not funded well enough to bail out even a handful of the biggest banks in America. It has enough money to pay depositors of about three big banks. After that, it's broke.

No doubt, most bank depositors would be shocked to learn this.

But think about it: No single entity could possibly insure all of the nation's bank deposits.

Yet, that FDIC sticker on the front of your bank is very reassuring. The discussions with your banker about your deposit "insurance" might be reassuring.

But, something that is not quite so reassuring is from none other than a former vice-chairman of the FDIC itself. Here's what Thomas Hoenig wrote for the Los Angeles Times in a Dec. 18, 2014 article titled, "FDIC couldn't cover a big bank bailout without taxpayer support":

As a reminder, when the financial industry imploded in 2008, Congress had to pass a special law to fund a $700-billion bailout … . The Federal Deposit Insurance Corp. had nowhere near enough resources to fund their resolution. [emphasis added]

Here's another insight from the new March Elliott Wave Theorist:

Did you know that most of the FDIC's money comes from other banks? This funding scheme makes prudent banks pay to save the imprudent ones, imparting weaker banks' frailty to the stronger ones.

The best way to protect your deposits is to adequately research the banks in your community and pick one where the banks' officers handle their customers' deposits prudently.

The new March Elliott Wave Theorist elaborates on safe banking in the U.S. as well as worldwide and admonishes readers to "act while you can."


Well, the next financial downturn may be severe enough to put many banks at risk of collapse.

This can happen quickly. Just recall the speed with which the global financial system found itself on the brink of a so-called "financial Armageddon" back in 2008.

Here in 2022, the new Theorist describes "four conditions in place at many banks that pose a danger" and one of them is exposure to leveraged "derivatives" -- a word the world became familiar with during the 2007-2009 financial crisis.

But, getting back to protecting your deposits, there are other steps you may want to consider taking beyond doing research on the banks in your community.

Indeed, the new Theorist mentions "a special offshore bank" and says it "appears to be one of the safest in the world."

Learn about that bank and get other "safe banking" insights as you read the new March Elliott Wave Theorist, which is part of our flagship investor package -- the Financial Forecast Service.

Just follow the link below to get started right away.

Protect Your Wealth During Financially Turbulent Times

Step back and look at the big picture.

Is it realistic to expect the bull market to persist in perpetuity? Are recessions (even depressions) things of the past?

If our read of financial and economic history is correct, the answer to both questions is a resounding "no!"

Yet, many observers appear lackadaisical about the prospects for financially hard times. Here's a Feb. 22 headline (Markets Insider):

Investors should ignore dire stock market predictions and prepare for a risk-on rally this spring, JPMorgan says

Conversely, the new March Elliott Wave Theorist says:

It is better to have your ideas laid out ahead of time rather than trying to make plans in a climate of fear and panic. I hope the suggestions herein will prove of some value.

Get insights for protecting your wealth as you read the new Elliott Wave Theorist, which is part of our flagship Financial Forecast Service.

Get started by following the link below.

Financial Forecast Service


All month long, Financial Forecast Service helps you stay ahead of the waves in the U.S. markets on the timeframes that matter the most. FFS covers the stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. It is our most popular service.

Comprises the monthly Elliott Wave Financial Forecast, 3x-per-week Short Term Update and at least 12x-per-year Elliott Wave Theorist.

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