FDIC & Your Cash

[heydude]

Where do you keep your savings? How about if you have more than 100,000 ???

FDIC limit is 100k so do you go to multiple places?

What kinds of places do you avoid that may not be FDIC covered?

[bunnys]

FDIC is $100,000 per account. You have to carefully rename your accounts and you can keep more than $100,000 per institution. And I thought that recently went up to $250,000, anyway.

Why would you be TRYING to avoid FDIC? I can understand electing to not get the protection of FDIC if you want a higher return but I don't know what the motivation for avoiding FDIC would be.

[Alan]

As of 2008 the FDIC guarantee is $250K per depositor, per bank. The FDIC does not guarantee funds in credit unions, the vast majority* of which are covered in the same amount by the NCUA, National Credit Union Administration.

*The NCUA covers all federal credit unions and most state chartered credit unions.

[rosarugosa]

Bunnys: I think he is talking about avoiding putting your money somewhere where it would not be FDIC protected, not about avoiding the FDIC.

[bae]

I keep my cash at Schwab, where SIPC provides $250k/$500k of protect per account, and there is additional backstopping over the SIPC limit by Lloyds for $150 million ($1.15 million cash coverage).

[Blackdog Lin]

I know I'm an unsophisticated investor doomer fruitcake on this stuff, and shouldn't be responding.....but if any major or semi-major bank or brokerage goes under, then the domino effect is gonna mean that those guarantees mean nothing. There isn't enough money in the FDIC (or any other protection firms) to handle the claims. Deriviatives, people. The FDIC (and other) backstops are only good as long as faith remains in the system.

I no longer have faith in the system - which is why I am able to sleep well at night regarding my savings. If my savings ever come to a point of needing the FDIC insurance paid out.....then things are bad, my savings are gone, and I am gonna have to make my own way with just trying to live a life.

It's kinda comforting, being a doomer.....

[iris lily]

...It's kinda comforting, being a doomer.....

Doomer chick, I hear ya.

Many years ago DH seemed to me to be cavalier about structuring our cash accounts for FDIC insured backing because as he said "if the financial markets come to to point where we need FDIC backup we will be in big trouble". Ummm yeah, dude.

It always seemed extremely short sighted to me to throw off that protection. I'm not saying that he was, necessarily, he just didn't seem to care about it in the way that I did. Of COURSE one takes that protection, for what it is worth.

Well, hon, here we are.

[bae]

It's kinda comforting, being a doomer.....

Yup, I'm not real worried either. If the financial system goes rubber-side-up, there will still be fish in the ocean off the beach here, deer in the woods, and crops in the fields. No worries, mon.

[freein05]

FDIC does not use it's money very often. With all of the bank closing during the Great Recession very few banks were actually cashed out. Generally FDIC finds another bank to take over the deposits of the closed bank. The reason you hear so much about too big to fail is FDIC would not have enough money to pay off the depositors of a bank the size of Bank of America.

I keep all my money in a brokerage account with SPIC insurance. I could if I wanted to buy CDs from almost any bank in the country through them. With cd rates what they are, I would not even consider them an investment today.