Friday, February 08, 2013

FDIC "protection" now capped at $250,000 - UPDATE

Ann Barnhardt modified her FDIC statement but still includes warning:
Point taken on the FDIC post. It is probably still PER INDIVIDUAL PER INSTITUTION, not per individual across institutions - at least that section is still on the FDIC website (thanks for sending those citations in), however, my other point still overshadows that point: the FDIC only has a few billion in assets against ten trillion in customer deposits, with the big-5 banks having over a trillion in customer money each. The big point is, the FDIC is not in any realistic sense any sort of protection.
More FDIC Smoke and Mirrors
Posted by Ann Barnhardt - February 8, AD 2013 8:47 AM MST

A reader sent this in. Effective December 31, 2012, FDIC insurance became AGGREGATED with a maximum PER OWNER cap of $250,000.

Many of you are under the impression that FDIC protection is per account, and thus if you just keep your money spread around and never keep more that a quarter-mil in cash in any one bank that you are "safe".

Nope. It is tied to your Social Security number / Tax ID number now.

And remember, total bank deposits in the U.S. are somewhere around TEN TRILLION DOLLARS and the FDIC deposit insurance fund as of March 31, 2012 had a whopping $15 BILLION.

Bottom line: if you think your bank deposits are "insured" or "safe" because of FDIC protection, you're totally irrational.

December 31, 2012 As scheduled, the unlimited insurance coverage for noninterest-bearing transaction accounts provided under the Dodd-Frank Wall Street Reform and Consumer Protection Act expired on December 31, 2012. Deposits held in noninterest-bearing transaction account are now aggregated with any interest-bearing deposits the owner may hold in the same ownership category, and the combined total insured up to at least $250,000.

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