Who is this money protected by? If the bank fails that will mean more then one is and how will everyone get the 100,000 they are insured for. If they print the money which they could wouldn't that cause terrible inflation? I just dont see how this 100,000 insurance would work if the banks that hold all the money go down....
2007-08-31 14:24:19 · 6 answers · asked by theoneandonly4251 2 in Business & Finance ➔ Insurance
Oh, honey, they aren't insured for "bank failed". They're insured for THEFT.
It's protected by YOU and ME. The taxpayer. Because FDIC, they get their money from TAXPAYERS. So if there are claims, it comes from our tax money.
Government doesn't make money - it takes money from the taxpayers and redistributes it.
2007-08-31 15:21:48 · answer #1 · answered by Anonymous 7 · 1⤊ 0⤋
The FDIC (Federal Deposit Insurance Corporation) or FSLIC (Federal Savings and Loan Insurance Corporation) actually insures your account at your institution. The banks pay an insurance premium for that coverage same as you pay car or homeowners insurance to protect your asset. You do NOT automtically get $ 100,000 if the bank fails...you are insured to a MAXIMUM of $ 100,000, or whatever your account balance was on the date of the bank failure plus any earned interest. So if you have more than $ 100,000 at one bank, it is a good idea to have the excess in a separate account to protect it. If you thought everyone got $ 100,000 when the bank failed, that would obviously make people want to have the bank fail when they only have $ 10 on deposit, but that is not the case. Banks are also regularly audited by government agencies and if any danger is exposed, their ratings go down, and their insurance premiums go up. Hope that helps.
2007-09-01 01:51:49 · answer #2 · answered by Mike 7 · 2⤊ 0⤋
The funds are guaranteed by the Federal Deposit Insurance Corporation, which has a direct pipe into the US Treasury. If a bank should fail, receivers will be appointed who will pay off the depositors. Since banks are routinely audited by the Comptroller of the Currency, and must maintain strict liquidity standards, failures are almost unheard of.
2007-09-01 00:26:53 · answer #3 · answered by Anonymous · 2⤊ 0⤋
Think of it this way, the FDIC is like a car insurance company that is not affiliated with the cars. I'm sure banks pay a HUGE premium every month to be insured in case anything happens and the FDIC could cover it, otherwise, what good would it do having the sign for FDIC insured banks?
2007-08-31 21:35:32 · answer #4 · answered by Jennifer 3 · 1⤊ 0⤋
Enroll in a few college courses - especially Economics - Money and Banking.
2007-09-01 13:50:53 · answer #5 · answered by insuranceguytx 5 · 1⤊ 1⤋
http://www.fdic.gov/
The tax payers got your back.
2007-08-31 21:31:53 · answer #6 · answered by miXzo 3 · 0⤊ 0⤋