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New numbers show customers at JPMorgan Chase, Wells Fargo and Bank of America are piling money into unprotected accounts.
The lenders’ quarterly Call Reports, submitted to the Federal Financial Institutions Examination Council (FFIEC), show the banks customers now collectively hold $2.62 trillion in uninsured cash.
US banks and the FDIC promise customers that deposits up to the amount of $250,000 will always be covered in the event of a collapse – but anything in excess is not insured.
That leaves trillions at risk – money from businesses, retirees, and families that could vanish overnight if a bank fails.
According to the Federal Deposit Insurance Corporation (FDIC), uninsured deposits at US banks grew across all asset size groups in the fourth quarter of 2024, based on reports from 4,487 FDIC-insured institutions.
Uninsured deposits surged by $126.6 billion, significantly outpacing the $43.7 billion rise in insured deposits during the same period.
In 2023, the FDIC protected all uninsured depositors at the disastrous, sudden failure of Silicon Valley Bank (SVB) by invoking a systemic risk exception, ensuring no losses despite $100 billion-plus in uninsured funds.
In contrast, at smaller banks like Republic First Bank, which failed in July of last year, uninsured depositors faced losses and received only partial recovery from asset sales since no systemic risk was declared.
The growth in uninsured deposits coincided with strong earnings numbers across the banking industry, with a reported total net income of $66.8 billion.
