Should we break assets into $100k FDIC insured blocks?

Question

How do I add a long explanation, or perhaps a followup question?

I made a blog with the post I found which prompted my question. Read this, and please comment:
http://dpesetsky.blogspot.com/

Answer 1

yes and remember at a bank all money in all accounts add up to the 100k -- other words in your have 50K in checking and 55k in savings you have 5k that is not insured!!!!

Answer 2

As a banker, let me tell you something: the concern with FDIC coverage is needless. FDIC is just an insurance company so there is nothing really special about it.

Since the FDIC is just a government controlled insurance company, we can come to a reasonable conclusion. As we know, if they government controls ANYTHING, it becomes less efficient and effective.

Trust your assets to big, private insurance companies such as AIG, The Hartford, New York Life, and Great West. They have more money than the FDIC anyway.

Additionally, by buying an annuity through one of these companies (which is a lot like a CD, except for a longer term and you normally earn more interest) you are automatically insured up to any amount... because it IS an insurance company after all!

What type of annuity or annuities you get should depend on your age and financial goals. If you are forty and want massive growth, go and find yourself a variable annuity. If you are seventy and are looking for security, get yourself a fixed annuity that has NO risk of loss providing the company doesn't go bankrupt. And there is truly ABSOLUTELY NO chance of that will a multi-billion dollar insurance company (remember, they are also HEAVILY regulated by the government to make sure that they stay in a reasonable financial position at all times).

I really hope this helps you to break out of what I call FDIC mode...and this is coming from a banker who makes money because people believe that putting their money in a 4% certificate of deposit while we make 12-15% on that same money is a good idea!

Answer 3

I'm not sure what your situation is (and I'm not about to start hunting through links to figure it out), but if you are responsible for placing more than $100,000 in bank accounts, I suggest splitting your deposits between different banks so you don't have more than $100,000 in any one bank. Banks do fail -- sometimes singly, sometimes in groups, as during the savings and loan crisis in the late 1980s and early 1990s. When a bank fails, the FDIC (the Federal Deposit Insurance Corporation) covers up to $100,000 per person for most types of accounts. If you have more than $100,000 deposited with any one bank and that bank fails, your money (over $100,000) may simply be lost.

Answer 4

Not sure what kind of assets you have. It matters what you have, how it's held, etc. If you've got a LOT of money, you may need to call the FDIC depending on your account types (esp. if a trust). Probably you'll end up wanting to use multiple banks--you'll see why:

"The basic insurance amount is $100,000 per depositor per insured bank. Certain retirement accounts, such as Individual Retirement Accounts, are insured up to $250,000 per depositor per insured bank."

"The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership.

You may qualify for more than $100,000 in coverage at one insured bank if you own deposit accounts in different ownership categories.

Common Ownership Categories
The most common ownership categories are:

Single Accounts
Certain Retirement Accounts
Joint Accounts
Revocable Trust Accounts "

"If a couple has a joint checking account and a joint savings account at the same insured bank, each co-owner's shares of the two accounts are added together and insured up to $100,000, providing up to $200,000 in coverage for the couple's joint accounts."

"Note: Determining coverage for living trust accounts can be complicated and requires more detailed information about the FDIC's insurance rules than can be provided in this publication. If you have a living trust account, contact the FDIC at 1-877-275-3342 for more information."
http://www.fdic.gov/deposit/deposits/insuringdeposits/