As per the rules of the Federal Deposit Insurance Corporation (FDIC), the standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. This means that in the event of a bank failure, the FDIC insures deposits up to $250,000.

However, in the case of a merger of two FDIC-insured banks - like in Fatou's situation - the deposits from the assumed bank continue to be insured separately for some time until they find a way to transfer some of the funds to other institutions. This grace period gives a depositor the opportunity to restructure his or her accounts, if necessary

Given that Fatou learned about the merger in December and the banks had merged a month before, it's less than six months from the merger date. Therefore, Fatou's deposits in both banks would still be separately insured. As such, she should be covered for $250,000 in each bank, for a total of $500,000.

Things to Remember

• FDIC (Federal Deposit Insurance Corporation) provides deposit insurance to depositors in US banks in case of bank failures.
• The standard insurance amount provided by FDIC is $250,000 per depositor, per insured bank, for each account ownership category.
• In the event of a bank merger, deposits from the assumed bank continue to be insured separately for a grace period.
• Depositors have the opportunity to restructure their accounts during this grace period to ensure full coverage.