Is Your Cash Safe at the Bank?

As furious IndyMac (IMB Quote) customers waited on long lines to withdraw their funds on Tuesday -- four days after the government took over the insolvent bank -- clients of other banks have begun to worry about the fate of their cash as well.

Regulators seized IndyMac on Friday, after a run on the bank evaporated more than $1.3 billion in deposits and pushed the bank over the edge of insolvency. IndyMac had already been struggling under the pressure of liquidity issues and the tanking housing market.

Some customers became irate when informed that only up to $100,000 in personal funds would be federally insured, and those waiting outside a branch in California's San Fernando Valley were threatened with arrest, the Associated Press reported.

The Pasadena, Calif.-based bank is the second-largest to fail in the history of the Federal Deposit Insurance Corp., and while every retail bank is not on the brink of disaster, it's unclear what might happen in the months ahead. ...