FDIC insurance (yet again)

"Gil Faver"

thanks. I guess that was just sloppy reporting, the way it was worded. I guess they mean to increase it beyond $250k. I guess.

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Business entities are currently insured ... directed from the FDIC Website: "Deposits owned by a corporation, partnership, or unincorporated association are insured up to $250,000 at a single bank, but are insured separately from the personal accounts of the entity's stockholders, partners, or members."

Jean Keener Keller, TX

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"Gil Faver"

"The ability of Eligible Entities to issue guaranteed debt under this program would expire on June 30, 2009. Initially, all Eligible Entities will be covered under this program for a period of 30 days. Prior to the end of this period, Eligible Entities must inform the FDIC whether they will opt-out of the guarantee program. If an Eligible Entity opts out of the program, the guarantee on newly issued senior unsecured debt and non-interest-bearing transaction deposit accounts will expire at the end of the 30-day period, regardless of the term of the instrument"

yes, they can opt out. I wonder if a bank opting out will bother to tell its customers . . .

Second, it applies to all

"FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs)."

this is from the FDIC website. Does this cover your concern?

also, does any of this apply to Credit Unions? I see nothing on any of this new stuff on the NCUA website.

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"Gil Faver" > appear that the money isn't getting this extra insurance.

FDIC insurance does not cover funds in deposit accounts _in excess of_ stated maximum coverage. The statement quoted above does not address how that maximum coverage is applied.

Do you get unlimited coverage on money you deposit to a transaction account even if the bank, unbeknownst to you, keeps it in a sweep account (which is by law not a transaction account)? If the insurance only applies so long as the bank doesn't sweep the money to a savings account (which is something you have no control over), then these accounts aren't really getting more insurance - at least not insurance the customer can rely on. Unreliable insurance is no insurance at all.

Since the stated purpose of providing unlimited coverage on _all_ non-interest bearing transaction accounts is to protect business payrolls, and (I don't believe) large businesses tend to use credit union demand deposit accounts, there would not seem to be a rationale for extending the unlimited insurance on DDAs to credit unions.

Mark Freeland snipped-for-privacy@nyc.rr.com

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