# FDIC coverage and banks **URL:** \ **Category:** Great Debates\ **Created:** [October 1, 2008, 7:51pm UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059 "2008-10-01T19:51:18Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![Lionne](https://avatars.discourse-cdn.com/v4/letter/l/8e8cbc/32.png) [@Lionne](https://boards.straightdope.com/u/Lionne)\ **Post date:** [October 1, 2008, 7:51pm UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/1 "2008-10-01T19:51:18Z")
I read [this](http://www.economist.com/daily/columns/businessview/displaystory.cfm?story_id=12328671&fsrc=nwl) Economist article today about the author going to his bank and asking about FDIC coverage on his account. When he saw that he had too much to be covered completely, he considered moving the excess to another bank. The banker finds a legal way to keep all his money with them, entirely covered. But he wonders whether such maneuvering will stand up if the financial market mess gets any worse. He writes at the end: > [@Economist](#): > > Might the politicians charged with cleaning up the mess decide, on populist “bash the rich” grounds, that anyone with more than $100,000 deserves to take a haircut on their savings, and thus that such schemes will not be given deposit insurance? My first instinct is one of aversion…there’s no way that would ever happen! Your money is your money, and if it’s in a legally titled account, it’s covered under FDIC. Period. I work in a bank, and I’ve gotten an insane number of questions on whether money is covered and how accounts can be opened and titled so more can be covered. I know there’s a lot of turmoil out there, and some giant companies have failed…but we shouldn’t have to ever worry about our covered assets, do we? ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 1, 2008, 8:33pm UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/2 "2008-10-01T20:33:11Z")
FDIC insurance should be raised immediately. I think it should be raised to at least one millions dollars. The failure (breaking the buck) of the Reserve Fund’s Primary Fund is just one reason I support this [Story](http://ther.com/pdfs/Press%20Release%20Primary%20Liqidation%202008_0929%20FINAL.pdf) ---
**Author:** ![Yeticus\_Rex](https://avatars.discourse-cdn.com/v4/letter/y/a698b9/32.png) [@Yeticus\_Rex](https://boards.straightdope.com/u/Yeticus_Rex)\ **Post date:** [October 1, 2008, 9:00pm UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/3 "2008-10-01T21:00:24Z")
> [@Lionne](#): > > I read [this](http://www.economist.com/daily/columns/businessview/displaystory.cfm?story_id=12328671&fsrc=nwl) Economist article today about the author going to his bank and asking about FDIC coverage on his account. When he saw that he had too much to be covered completely, he considered moving the excess to another bank. The banker finds a legal way to keep all his money with them, entirely covered. But he wonders whether such maneuvering will stand up if the financial market mess gets any worse. He writes at the end: > My first instinct is one of aversion…there’s no way that would ever happen! Your money is your money, and if it’s in a legally titled account, it’s covered under FDIC. Period. > I work in a bank, and I’ve gotten an insane number of questions on whether money is covered and how accounts can be opened and titled so more can be covered. I know there’s a lot of turmoil out there, and some giant companies have failed…but we shouldn’t have to ever worry about our covered assets, do we? [CDARS program.](http://www.cdars.com/index.php) As for the Economist’s off the hip remark, they doesn’t really know jack when it comes to meeting payroll in a small business that pays out more than $100K per month and must have more than that amount in the bank. ---
**Author:** ![Yeticus\_Rex](https://avatars.discourse-cdn.com/v4/letter/y/a698b9/32.png) [@Yeticus\_Rex](https://boards.straightdope.com/u/Yeticus_Rex)\ **Post date:** [October 1, 2008, 9:14pm UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/4 "2008-10-01T21:14:26Z")
> [@dalej42](#): > > FDIC insurance should be raised immediately. I think it should be raised to at least one millions dollars. > > The failure (breaking the buck) of the Reserve Fund’s Primary Fund is just one reason I support this > [Story](http://ther.com/pdfs/Press%20Release%20Primary%20Liqidation%202008_0929%20FINAL.pdf) There’s also [SIPC coverage](http://www.schwab.com/public/schwab/nn/legal_compliance/asset_protection.html?cmsid=P-2466992&lvl1=nn&lvl2=legal_compliance&refid=P-2467741&refpid=P-1005935) as well with certain institutions, like Schwab. [SIPC](http://www.sipc.org/) ---
**Author:** ![dalej42](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@dalej42](https://boards.straightdope.com/u/dalej42)\ **Post date:** [October 2, 2008, 1:43am UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/5 "2008-10-02T01:43:34Z")
SIPC doesn’t cover a money market fund breaking the buck, however. ---
**Author:** ![Yeticus\_Rex](https://avatars.discourse-cdn.com/v4/letter/y/a698b9/32.png) [@Yeticus\_Rex](https://boards.straightdope.com/u/Yeticus_Rex)\ **Post date:** [October 2, 2008, 4:05am UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/6 "2008-10-02T04:05:52Z")
> [@dalej42](#): > > SIPC doesn’t cover a money market fund breaking the buck, however. Right. My bad. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [October 2, 2008, 4:21am UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/7 "2008-10-02T04:21:00Z")
I recall somebody calculating that you could have up to 8 separately insured accounts with FDIC protection in a single bank. The author of the Economist piece probably didn’t have access to the internet, but for those who do, [the FDIC has a discussion](http://www.fdic.gov/deposit/deposits/insured/faq.html): > [@FDIC](#): > > Can I increase my insurance coverage by dividing my deposits into several different accounts at the same insured bank? > > Deposit insurance coverage can be increased only if the accounts are held in different categories of ownership. These categories include single accounts, retirement accounts, joint accounts and revocable trust accounts. The requirements for obtaining separate insurance coverage in the ownership categories are explained elsewhere in the Ownership Categories section of this document. Ok, what about the idea of raising the limit to $250,000? One [blogger opines](http://www.capitalgainsandgames.com/blog/pete-davis/556/eesa-250-000-deposit-insurance-will-sail-through-house-thursday): > [@Pete Davis](#): > > Any good economist will inquire as to who wins from this proposal and who loses. The winners, as one of my Wall Street clients just put it, are “the dumb rich” and businesses who can’t keep their working capital accounts below $100,000. The “smart rich” long ago moved their money to safer places. Most Americans don’t have more than $100,000 in their bank accounts, and if they do, it’s in a retirement account which is insured up to $250,000 already. > > The losers down the road will be the taxpayers and conservative banks. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [October 2, 2008, 4:30am UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/8 "2008-10-02T04:30:12Z")
More seriously, if the FDIC fund is depleted, they have a credit line to the Treasury that they can tap. If that runs out, I strongly suspect that Congress will grant a refill: it would make sense on both political and economic grounds. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [October 2, 2008, 5:09am UTC](https://boards.straightdope.com/t/fdic-coverage-and-banks/466059/9 "2008-10-02T05:09:24Z")
[Ron Paul thinks the FDIC limit raising idea is terrible.](http://www.cnn.com/2008/POLITICS/10/01/paul.qanda/index.html)