FDIC: Lifting the Insurance Deposit Cap?

By Staff Reporters


Understanding FDIC insurance limits

The FDIC wants to make sure it can cover everyone with a bank account, so to make that happen, it caps how much money it insures. The FDIC says its standard is to cover up to “$250,000 per depositor, per insured bank, for each account ownership category.

CITE: https://www.r2library.com/Resource/Title/082610254

Here’s an example: Let’s say you have $100,000 in your checking account and $150,000 in your savings, all at the same bank. The FDIC classifies those under the same category: single accounts. So you would have hit your FDIC deposit limit. Every additional cent deposited into either account would be uninsured. But if you have money in other banks or other deposit categories, you may have additional coverage.

Could the insured deposit cap get a lift?

At least four US lawmakers—two from each side of the aisle—said they would support raising the cap on FDIC-insured deposits in order to reassure frazzled bank customers that their deposits are safe. The current cap is $250,000 (up from $100k pre-financial crisis), but Democratic Sen. Elizabeth Warren said bumping it up “is a good move.” Opponents of raising the cap say it would only increase risk-taking and bad behavior by banks. Some even argue we should lower it.


Thank You


ORDER: https://www.routledge.com/Risk-Management-Liability-Insurance-and-Asset-Protection-Strategies-for/Marcinko-Hetico/p/book/9781498725989


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