Advance Dividend

Keep the masses calm. Stop the bank runs. An advance dividend works in tandem with the Federal Deposit Insurance Corporation (FDIC). The FDIC offers insurance to U.S. commercial banks and savings institutions to cover a depositor's funds up to $250,000 in case of a bank failure.

For uninsured deposits, when a bank fails, the FDIC estimates the value of bank assets being liquidated to provide immediate payment to those uninsured depositors, keeping fear in check...although it somehow seems unfair to those with insurance.