4 ms·

I'm not sure how this contradicts what I said, isn't FDIC an insurance company set up to act when your bank disappear with your money you had there ? What if y

I'm not sure how this contradicts what I said, isn't FDIC an insurance company set up to act when your bank disappear with your money you had there ? What if your bank is not a member of FDIC ? It's sort of what the European Union has with those bail ins, deposits are guaranteed up to 100k but this comes from inside the bank, first from shareholders and creditors then larger accounts. Makes sense that the public should not have to pay for the failure of a private banking entity.

Jtsummers 12y ago
> What if your bank is not a member of FDIC ? Then don't do business with that bank. The vast majority of banks and credit unions in the US offer insured accounts. If yours doesn't you should move your money elsewhere. The FDIC insurance is $250k per insured-account-type per institution. That is, if I have a checking and a retirement account with one bank I'm insured for a total of up to $500k. Anything exceeding that needs to be in another account type or another bank to be insured. Most investment accounts aren't insured, but some brokerage accounts are (you'll get that info when you talk to your bank) but the investments themselves (naturally) are not, just the value of any non-invested cash. The cost (in the US) is put upon the banks to pay for this insurance. It's just a federally created insurance agency. Barring a major collapse across many (most?) banks, it should have enough stored up over the years to cover the cost without requiring financing from the federal government. In theory, you can have private insurance (I believe these do exist) for your bank, but I'm not sure how common this is in the US. Like most insurance schemes, the more participants the more affordable it is. It'd be a tough market for someone else to break into.

4 ms·

I'm not sure how this contradicts what I said, isn't FDIC an insurance company set up to act when your bank disappear with your money you had there ? What if y

by bigbugbag 12y ago

Jtsummers 12y ago
> What if your bank is not a member of FDIC ? Then don't do business with that bank. The vast majority of banks and credit unions in the US offer insured accounts. If yours doesn't you should move your money elsewhere. The FDIC insurance is $250k per insured-account-type per institution. That is, if I have a checking and a retirement account with one bank I'm insured for a total of up to $500k. Anything exceeding that needs to be in another account type or another bank to be insured. Most investment accounts aren't insured, but some brokerage accounts are (you'll get that info when you talk to your bank) but the investments themselves (naturally) are not, just the value of any non-invested cash. The cost (in the US) is put upon the banks to pay for this insurance. It's just a federally created insurance agency. Barring a major collapse across many (most?) banks, it should have enough stored up over the years to cover the cost without requiring financing from the federal government. In theory, you can have private insurance (I believe these do exist) for your bank, but I'm not sure how common this is in the US. Like most insurance schemes, the more participants the more affordable it is. It'd be a tough market for someone else to break into.