Skip to comments.FDIC Unlimited Insurance to expire after January 1, 2013
Posted on 12/30/2012 11:59:07 AM PST by MeneMeneTekelUpharsin
Got a letter from our bank which basically says:
Beginning January 1, 2013, noninterest-bearing transaction accounts will no longer be insured separately from depositors other accounts at the same IDI. Instead, noninterest-bearing transaction accounts will be added to any of a depositors other accounts in the applicable ownership category, and the aggregate balance insured up to at least the Standard Maximum Deposit Insurance Amount (SMDIA) of $250,000, per depositor, at each separately chartered IDI.
For example, if after the expiration of the Dodd-Frank Deposit Insurance Provision a depositor under the single ownership category has $500,000 deposited in a noninterest-bearing transaction account and $250,000 deposited in a certificate of deposit, or total deposits of $750,000, the depositor would be insured for up to $250,000 and uninsured for the remaining balance of $500,000.
Depositors should be made aware that Section 335 of the Dodd-Frank Act permanently increases the SMDIA to $250,000.
With inflation, $250,000 is going to be very little pretty soon. Folks with several million in accounts are only protected from bank failure up to $250,000. So, they divide their money into many accounts in many different banks trying to protect as much of it as possible. Should some big banks fail, a lot of folks are going to be unhappy.
Not much of a promise, anyway, since by law FDIC can take up to 99 years to pay you back.
The 250K that is insured, is adjustable down to $.10 on the Dollar.
Trying to drive more people into the stock market. Same reason CDs pay almost zero interest.
Looks like President Cloward-Piven’s “overwhelming of the system” is about to shift gears.
True. This “take away” is on ‘noninterest-bearing transaction accounts’ ... it does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts.
Though truthfully the little bit of interest earned isn’t a game changer for most budgets.
Dodd, Frank gee, where have I heard those names before? /wink-wink
It hasn’t been that long since it was $100,000.
That insurance is expensive as hell..especially with banks on the brink over the past ten years or so.
And FDIC has usually been on all of your accounts. Credit unions and community banks had other coverage.
$250,00 is still quite a bit for the average American.
With coming inflation, probably not for long.
We will see deflation before we see significant inflation. The money being used to buy up mortgages is not being injected back into the economy. It is being used to clean up balance sheets.
After a year of pure monetization you might see some inflation. We are still a while away from that.