Large Cash Deposit/FDIC after 2012

[bigH]

Hi All,

Hope everyone is healthy and well. I know this topic comes up sometimes, but with the law changing in 8 months it is good to be current.

I currently have a non-interest bearing account (with TD bank in PA0. Until the end of Dec 2012, ANY funds (no limit) in the account are covered. Past that, I am looking at options for protecting the deposits. The cash will be distributed eventually, but even if it is sitting there for a few weeks/months, I'd like it to be secure. What will bogelheads do to protect deposits past 2012 in excess of 250k/500k?

Thanks

[donall]

FDIC limits are actually more generous than most people think. Please refer to the FDIC link that explains ownership and has excellent examples.
http://www.fdic.gov/deposit/deposits/in ... rship.html
In most cases one could just retitle ownership of accounts.

[bigH]

I know you can do alot with personal accounts but what about when you have a business account and only one name for the business?

[stan_the_man]

You can always open up accounts at other banks to limit your exposure -- since you have a new deposit insurance limit at each bank (not branch).

[CaliJim]

Short term treasury bills are a good option too.

Vanguard Federal Money Market Fund (VMFXX) if you have access to it.

[TN_INVEST]

What has your banker advised?

Perhaps the CDARS program would work?

[bigH]

What has your banker advised?

Perhaps the CDARS program would work?

My banker said we are one of the safest banks in the country. I take lightly after everything that happened in 2008. One lesson from the financial crisis you never know how safe a back is until crisis hits where it really gets tested.

[nisiprius]

Just for something to do, I'd see what ratings BankRate and BauerFinancial give your bank. I don't know how much credence to give those ratings, but at least it's an independent check of what your banker is telling you. The ratings are not phony in the sense that, yeah, lots of real banks do get imperfect ratings. "Our" bank gets three out of five stars at BankRate, for example. I have the sense that BauerFinancial might have a bit of "grade inflation" relative to BankRate. They have reports that don't mean much to me that explain the various financial ratios they used to get the ratings.

http://www.bankrate.com/rates/safe-soun ... earch.aspx
http://www.bauerfinancial.com/btc_ratings.asp

[Bongleur]

Also check Weiss. They email you when the rating changes.

weisswatchdog.com/

[TN_INVEST]

What has your banker advised?

Perhaps the CDARS program would work?

My banker said we are one of the safest banks in the country. I take lightly after everything that happened in 2008. One lesson from the financial crisis you never know how safe a back is until crisis hits where it really gets tested.

Did he give advice, or did he just tell you they were a safe bank?

If you have a good banking relationship, he ought to be able to work with you on a few things. I know the private bankers around here will do that. CDARs is often one of the approaches. It's not always advertised, and not everybody at the bank knows it exists (your bank might not even offer it).