by Gary Kah Yes, it's true! The Federal Deposit Insurance Corporation (FDIC), the organization that "insures" your bank deposits, is officially broke. It ran out of money in early October due to the large number of banks that are continuing to fail.1 This news came in spite of the fact that the FDIC had raised its rates to member banks earlier in the year in an attempt to shore up its dwindling reserves.
When the financial crisis began in September of last year, the FDIC reported that 117 banks were in trouble. Since then approximately 80 percent of the banking companies on that list have gone under. To make matters worse, according to the FDIC the current number of troubled banks has risen to over 400.2 Let's think positive and say that only 50 percent of these institutions will fail during the next year; that could mean the closing of another 200 banks â€“ twice as many as in the last 12 months. (Seven banks failed in just one day on October 23rd.)3