Banks are closing at a slower rate than they did a decade ago, but the number varies by year and region
Bank closures happen. The Federal Deposit Insurance Corporation (FDIC) tracks every one. In 2023, the United States saw three bank failures. In 2022, there were five. In 2020, there were four. These numbers are much lower than the 2008 financial crisis, when over 140 banks failed in a single year, or even 2011, when there were still 92 closures.
What you're likely hearing about is branch closures, which are different from bank failures. Banks shut physical locations all the time—sometimes dozens per year from a single large bank—because fewer people visit branches to deposit checks or withdraw cash. A branch closing does not mean the bank is failing. It means the bank decided that location was not profitable enough to keep open.
The confusion matters because it changes what you need to do. If your bank fails, the FDIC steps in and protects your deposits up to $250,000 per account type at that bank. If your branch closes, your money is fine—you just have to bank somewhere else or use a different branch.
Key Takeaways
- Bank failures are rare in the current environment; the FDIC closed three banks in 2023 and five in 2022, compared to over 140 per year during the 2008 crisis.
- Branch closures are common and happen when banks decide physical locations are no longer profitable, but they do not affect the safety of your deposits.
- The FDIC insures deposits up to $250,000 per account type at each bank, so your money is protected even if a bank fails.
- If your bank closes, you will need to move your accounts to another bank, but the FDIC or your bank will notify you and give you time to do so.
- Regional banks and smaller institutions have closed more frequently in recent years than large national banks, but the overall closure rate remains historically low.
Why banks close branches (and why it matters to you)
Banks close branches because the cost of running a physical location—rent, staff, utilities, security—no longer makes sense against the revenue that branch generates. This happens most often in areas where customers have moved to online banking, or where a bank has multiple branches within a short distance and can consolidate.
When a bank announces a branch closure, it typically gives customers 60 to 90 days' notice. The bank will tell you which other branches or ATMs you can use instead. Your accounts do not close. Your debit card still works. Your online banking still works. You straightforward cannot walk into that physical location anymore.
Large banks like Bank of America, Wells Fargo, and JPMorgan Chase have closed hundreds of branches over the past five years as they shift customers toward digital banking. Smaller regional banks have done the same. This is a trend, not a crisis.
What happens if a bank actually fails
A bank failure is when a bank runs out of money and cannot pay its depositors. This is rare. The FDIC monitors banks constantly and steps in before a bank gets to the point of complete collapse. When the FDIC does close a bank, it happens on a Friday evening, and the bank is closed by Monday morning.
The FDIC then takes over the bank's assets and liabilities. In most cases, another bank buys the failed bank's deposits and branches, and customers wake up Monday to find their accounts have moved to a new bank. Your debit card may change. Your account number may change. But your money is still there, up to $250,000 per account type.
If no bank wants to buy the failed bank's deposits, the FDIC pays depositors directly from its insurance fund. This process can take weeks or months, but you will receive your money. The FDIC has never failed to pay an insured deposit.
How FDIC insurance actually protects your money
The FDIC insures deposits, not banks. The limit is $250,000 per depositor, per bank, per account type. This means if you have $250,000 in a checking account at Bank A and $250,000 in a savings account at Bank A, both are fully insured because they are different account types. If you have $300,000 in checking at Bank A, only $250,000 is insured.
If you have accounts at multiple banks, each bank's deposits are insured separately. So $250,000 at Bank A and $250,000 at Bank B are both fully insured. The account type matters: a joint account is insured separately from an individual account at the same bank.
You do not need to do anything to set up FDIC insurance. It is automatic. You do not pay for it. The FDIC is funded by fees that banks pay, not by taxpayers.
Regional bank closures and what triggered them
In March 2023, Silicon Valley Bank (SVB) and Signature Bank failed on the same day. These were not small banks—SVB was the 16th largest bank in the United States by assets. Both failed because they held large amounts of long-term bonds that lost value when interest rates rose, and when depositors rushed to withdraw money, the banks did not have enough cash on hand.
The FDIC closed both banks over a weekend. Depositors with more than $250,000 in uninsured deposits initially faced losses, but the U.S. Treasury and Federal Reserve stepped in and protected all deposits at both banks, even those above the insurance limit. This was an extraordinary measure, not standard procedure.
These failures were unusual because they happened to large, well-known banks in a short time frame. They sparked conversations about bank safety, but they did not trigger a wave of closures. The banking system did not collapse. Most depositors recovered their money.
How to know if your bank is in trouble
You can check a bank's health using the FDIC's Bank Find tool, available on the FDIC website. You enter the bank's name and state, and the tool shows you whether it is FDIC-insured, what its insurance coverage limits are, and basic information about its operations. This is public information.
The FDIC also publishes a "Problem Bank List" quarterly, which names banks that are under heightened supervision due to financial or operational issues. This list is not secret—it is published on the FDIC website. A bank on this list is not necessarily going to fail, but it is being watched closely.
If you are concerned about a specific bank, you can also check its most recent financial reports, which are public. Banks file quarterly and annual reports with banking regulators. These reports show assets, liabilities, capital ratios, and loan quality. A bank with declining capital or rising loan losses is a warning sign.
What to do if your bank closes or fails
If your bank announces a branch closure, do nothing when ready. Your accounts are not affected. You can continue banking online or at another branch. If you prefer to move your accounts, you can do so at your own pace. There is no rush.
If your bank fails, the FDIC or the acquiring bank will contact you. You will receive written notice explaining what happened and what your next steps are. If another bank acquired your deposits, your accounts will be transferred automatically. You may receive a new debit card and new account numbers, but your money will be there.
If you have deposits above the $250,000 insurance limit, contact the FDIC when ready. The FDIC has a claims process, and you will need to document your deposits. The FDIC's phone number and claims process information are published when a bank fails.
Frequently Asked Questions
Is my money safe in a bank right now?
Yes, as long as your deposits are under $250,000 per account type at each bank. The FDIC insures deposits automatically. If you have more than $250,000, spread it across multiple banks or account types to stay within the insurance limit.
What if I have more than $250,000 at one bank?
Only $250,000 per account type is insured. If you have $500,000 in a checking account, $250,000 is insured and $250,000 is not. You can protect the second $250,000 by opening a savings account at the same bank (different account type) or by moving money to another bank.
If my bank closes a branch, do I lose my accounts?
No. A branch closure does not affect your accounts. Your money stays in the bank. You can use other branches, ATMs, or online banking. If you want to move to a different bank, you can do so, but you are not required to.
How do I know if a bank is failing before it closes?
The FDIC publishes a Problem Bank List quarterly on its website. You can also check a bank's financial reports, which are public. However, even banks on the problem list may not fail. The FDIC works to prevent failures before they happen.
What happens to my direct deposits and automatic payments if my bank fails?
If another bank acquires your deposits, your direct deposits and automatic payments will transfer to the new bank. You may need to update your account information with employers or billers if your account number changes. The acquiring bank or the FDIC will provide instructions.