The Federal Deposit Insurance Corp. (FDIC) saw its insurance fund, which protects bank deposits, fall 20% in the second quarter to $10.4 billion, the lowest level in 16 years. The FDIC, which closed 81 banks this year, said it still has 416 banks on its “problem list,” up from 305 at the end of March.

Despite the drop, you probably don’t have to worry about the money you have deposited in most checking and savings accounts. “While challenges remain, evidence is building that the U.S. economy is starting to grow again,” said FDIC Chairman Sheila Bair. “Banking industry performance is–as always–a lagging indicator. The banking industry, too, can look forward to better times ahead. But, for now, the difficult and necessary process of recognizing loan losses and cleaning up balance sheets continues to be reflected in the industry’s bottom line.”

So what do you need to know about how the decline of the FDIC insurance fund could affect you?

• Banks might be less willing to lend money if they have to pay special fees to get more cash in the fund
• Banks might offer lower interest rates on savings accounts, CDs, and money market accounts
• Make sure to cap deposits to $250,000 or less per depositor for each account

The bottom line is that it’s still safe to deposit money in banks. Look for competitive interest rates on deposits.

• EverBank‘s intro rate for its checking and money market account lowered to 5.01% APY (was 5.51%) Standard rate lowered to 4.26% (was 4.51%).
• Citibank‘s Ultimate Savings Account and e-Savings Account rates lowered to 3.75% APY (was 4.00%) The Ultimate Money Account rate (which Citi heavily advertises) remains at 4.50% APY but this rate has an online bill payment requirement.
• Capital One‘s High Yield Money Market rate lowered to 4.30% APY (was 4.40%)
• Provident Credit Union‘s reward checking account rate lowered to 5.51% APY (was 6.01%). Provident CU allows for easy membership so this is one of the few reward checking accounts available nationally.