Many banks don't have the correct FDIC stickers/notices

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
User avatar
Topic Author
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Many banks don't have the correct FDIC stickers/notices

Post by dm200 »

Having been in several different bank branches recently, I notice that these ones do not have the latest (and correct) notices of federal insurance. The ones I saw still say insured to at least $250,000 until December 31, 2013. In fact, the $250,000 insurance amount has been made permanent.
sscritic
Posts: 21853
Joined: Thu Sep 06, 2007 8:36 am

Re: Many banks don't have the correct FDIC stickers/notices

Post by sscritic »

dm200 wrote:Having been in several different bank branches recently, I notice that these ones do not have the latest (and correct) notices of federal insurance. The ones I saw still say insured to at least $250,000 until December 31, 2013. In fact, the $250,000 insurance amount has been made permanent.
And what is not correct about the notice? Is the account not insured for $250,000 until December 31, 2013?

I am 64 until my next birthday. That is a correct statement even if I say nothing about what will be true after my next birthday. :)
User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Re: Many banks don't have the correct FDIC stickers/notices

Post by norookie »

sscritic wrote:
dm200 wrote:Having been in several different bank branches recently, I notice that these ones do not have the latest (and correct) notices of federal insurance. The ones I saw still say insured to at least $250,000 until December 31, 2013. In fact, the $250,000 insurance amount has been made permanent.
And what is not correct about the notice? Is the account not insured for $250,000 until December 31, 2013?

I am 64 until my next birthday. That is a correct statement even if I say nothing about what will be true after my next birthday. :)
Both you posters contribute great info on this board. sscritic your ss info is incrediable! Did you know that any account not paying interest in most banks these days is not insured period. ie no interest FREE checking? I've no link to this but its posted in one of my banking institutions.- just sayin- ETA: My free checking @ HydeParkSavings insurance status is in limbo. I'll get the definite answer next time I visit there, this thread has me 'veewy veewy interested now! :wink:
Last edited by norookie on Mon Aug 23, 2010 12:42 pm, edited 1 time in total.
" Wealth usually leads to excess " Cicero 55 b.c
drewhaa
Posts: 66
Joined: Fri Jul 10, 2009 8:58 pm

Re: Many banks don't have the correct FDIC stickers/notices

Post by drewhaa »

dm200 wrote:Having been in several different bank branches recently, I notice that these ones do not have the latest (and correct) notices of federal insurance. The ones I saw still say insured to at least $250,000 until December 31, 2013. In fact, the $250,000 insurance amount has been made permanent.
They must switch the signs by January 3, 2011:
To ensure depositors are accurately informed of the permanent SMDIA of $250,000, insured depository institutions should promptly obtain the new official signs and, upon receipt, display them without delay - in any event not later than January 3, 2011, the date for mandatory compliance with the final rule.
http://fdic.gov/news/news/financial/2010/fil10049.html


Norookie, do you have any support for your assertion that certain accounts aren't covered? There is a program called the Temporary Liquidity Guarantee Program (TLGP), which actually does the opposite of what you're saying by providing unlimited insurance on certain non-interest-bearing accounts (provided your bank opted in). It ends at the end of 2010, unless it is extended.

http://www.fdic.gov/regulations/resourc ... index.html
User avatar
Topic Author
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Re: Many banks don't have the correct FDIC stickers/notices

Post by dm200 »

norookie wrote:
sscritic wrote:
dm200 wrote:Having been in several different bank branches recently, I notice that these ones do not have the latest (and correct) notices of federal insurance. The ones I saw still say insured to at least $250,000 until December 31, 2013. In fact, the $250,000 insurance amount has been made permanent.
And what is not correct about the notice? Is the account not insured for $250,000 until December 31, 2013?

I am 64 until my next birthday. That is a correct statement even if I say nothing about what will be true after my next birthday. :)
Both you posters contribute great info on this board. sscritic your ss info is incrediable! Did you know that any account not paying interest in most banks these days is not insured period. ie no interest FREE checking? I've no link to this but its posted in one of my banking institutions.- just sayin-
No, the statement that any account at an FDIC or NCUA federally insured institution is not insured is FALSE. Non-interest bearing checking accounts at both FDIC and NCUA insured institutions are fully backed for a limited period. You should not, in my opinion, make such inflammatory statements without justification.

Go back to that posting and either read it again or challenge the bank. I think you read it wrong.
User avatar
nisiprius
Advisory Board
Posts: 52105
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Re: Many banks don't have the correct FDIC stickers/notices

Post by nisiprius »

norookie wrote:Did you know that any account not paying interest in most banks these days is not insured period. ie no interest FREE checking? I've no link to this but its posted in one of my banking institutions.- just sayin-
My own ability to overlook or misread things constantly amazes/alarms/amuses me. I agree with others that I find this hard to believe, but fascinating and important to know if true. State laws, who knows? Maybe there could be some weird bank in some weird state for which this could be true. If it is true I think there's something wrong with your banking institution.

I would love it if you'd go out there with a digital camera and get a snapshot of the notice. If there is some kind of notice but you misread it, well, if you misread it I'll bet a lot of other people are misreading it too, so let's see what it is you saw or thought you saw.

Me, just the other day, I was looking over someone's shoulder and thought I saw this message on his screen:
Do you want to save this life, or find a program online to open it?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
User avatar
norookie
Posts: 3016
Joined: Tue Jul 07, 2009 1:55 pm

Post by norookie »

:D I in NO WAY mean to alarm anyone. However I'm sure at Hyde Park Saving bank(MA) this is posted. I saw a FDIC insured like, NEW paper posted on the tellers counter that said "After a certain date, your "no interest checking accounts will no longer be insured". I too was alarmed the way things have been going with banks! I asked the teller whom knew nothing about it. So a woman from the rear offices came out and "attempted" to explain it to me, her stating she really did not understand it fully either. There might in fact be another insurance substitution for the FDIC, concerning "NO INTEREST" Free Checking accounts there. I myself only use it for the free checks :oops: I know it sounds stupid but I only keep money in there that I've already allocated into "spent checks". In other words I keep little money there unless I transfer it from savings to cover written checks. Or checks i'm going to write. I do not have a camera to take a pic of it. http://www.hydeparkbank.com/99368.html as you can see its says free checking insured TILL 2009. I do not know the exact facts concerning thing's now.
" Wealth usually leads to excess " Cicero 55 b.c
Scorpion
Posts: 388
Joined: Mon Sep 14, 2009 6:56 am

Post by Scorpion »

Sort of on topic, accounts at the same bank entitled in the same name only get $250K of total protection, right? somebody was trying to tell me recently that if you have different accounts (i.e., a checking, a savings, a CD), they are each entitled to $250K of protection.
cubedbee
Posts: 312
Joined: Tue Aug 04, 2009 11:13 am

Post by cubedbee »

http://www.fdic.gov/deposit/deposits/in ... asics.html
FDIC insurance covers all types of deposits received at an insured bank, including deposits in a checking account, negotiable order of withdrawal (NOW) account, savings account, money market deposit account (MMDA) or time deposit such as a certificate of deposit (CD).
Note: Beginning December 31, 2010 through December 31, 2012, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions.
cubedbee
Posts: 312
Joined: Tue Aug 04, 2009 11:13 am

Post by cubedbee »

Scorpion wrote:Sort of on topic, accounts at the same bank entitled in the same name only get $250K of total protection, right? somebody was trying to tell me recently that if you have different accounts (i.e., a checking, a savings, a CD), they are each entitled to $250K of protection.
That somebody is wrong.

http://www.fdic.gov/deposit/deposits/insured/faq.html
Single Account Ownership Category: The FDIC combines all single accounts owned by the same person at the same bank and insures the total up to $250,000.
richard
Posts: 7961
Joined: Tue Feb 20, 2007 2:38 pm
Contact:

Post by richard »

norookie wrote:I do not have a camera to take a pic of it. http://www.hydeparkbank.com/99368.html as you can see its says free checking insured TILL 2009. I do not know the exact facts concerning thing's now.
It says: "Full FDIC insurance coverage for non-interest bearing accounts through December 31, 2009" The word you're not seeing is "full."

Non-interest bearing checking is now fully insured. In other words, there is no dollar limit (2009 in the quote has been extended). After full insurance ends, non-interest bearing checking will only be insured up to the FDIC limit, $250,000.

Somewhat poor reading comprehension on your part, but the fault really lies with the bank for bad wording.
User avatar
nisiprius
Advisory Board
Posts: 52105
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Post by nisiprius »

This business of repeatedly extending time-limited deposit insurance limits is a recipe for consumer confusion.

Image
That's fascinating, norookie! Talk about a notice that raises more questions than it answers!

I do not think norookie is having any problems with reading comprehension. In itself, and with the date being given as 2009, it is very hard to extract a literal meaning from that statement without reading in any additional assumptions. As written, I think the most accurate reading of the statement is "Based on the information provided on this web page, it is not possible to tell whether or not a Hyde Park Bank checking account is insured."

I'm sure cubedb has the correct answer:
cubedbee wrote:http://www.fdic.gov/deposit/deposits/in ... asics.html
Note: Beginning December 31, 2010 through December 31, 2012, deposits held in noninterest-bearing transaction accounts will be fully insured, regardless of the amount in the account, at all FDIC-insured institutions.
By the way, since this bank is a member of DIF, all deposits at this bank are fully insured with no dollar limit--DIF taking over where FDIC leaves off. Whether DIF insurance is any good or not, I wouldn't know. Here's a link to the DIF website. Actually, it must be good insurance, or why else would these people be smiling? :)
Image
Last edited by nisiprius on Mon Aug 23, 2010 1:21 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
cubedbee
Posts: 312
Joined: Tue Aug 04, 2009 11:13 am

Post by cubedbee »

http://www.fdic.gov/deposit/deposits/insured/index.html
The FDIC’s temporary Transaction Account Guarantee (TAG) Program provides depositors with unlimited coverage for noninterest-bearing transaction accounts at participating FDIC-insured institutions. Noninterest-bearing checking accounts include Demand Deposit Accounts (DDAs) and any transaction account that has unlimited withdrawals and that cannot earn interest. Also included are IOLTA accounts (regardless of the interest rate) and NOW accounts that do not earn more than 0.25% interest. This unlimited protection is only available at insured depository institutions that continue to participate in the TAG Program. The program is temporary and will remain in effect through December 31, 2010, unless extended by the FDIC
http://www.fdic.gov/deposit/deposits/changes.html
October 14, 2008
FDIC announced its temporary Transaction Account Guarantee Program, which provides full coverage for noninterest-bearing transaction deposit accounts at FDIC-insured institutions that agree to participate in the program. The transaction account guarantee applies to all personal and business checking deposit accounts that do not earn interest, low-interest NOW accounts (NOW accounts that cannot earn more than 0.5% interest), Official Items, and IOLTA accounts. This unlimited insurance coverage is temporary and will remain in effect for participating institutions through December 31, 2009.

TAG is optional, and used to end 12/31/09 (it's been extended twice since then). The bank either has been negligent in updating their site or opted out of the TAG extension. Regardless, even without TAG, non-interest bearing accounts were always included in the $250k that was insured. As richard notes, the key word is "full"---tag made coverage unlimited on non-interest bearing accounts. And, as I've posted, starting 12/31/10, all FDIC-insured banks will have unlimited insurance on non-interest bearing accounts.

So, norookie was very mistaken, believing almost the opposite of what is true, but it is confusing by relying on the banks statements alone instead of going to the FDIC website.
User avatar
nisiprius
Advisory Board
Posts: 52105
Joined: Thu Jul 26, 2007 9:33 am
Location: The terrestrial, globular, planetary hunk of matter, flattened at the poles, is my abode.--O. Henry

Post by nisiprius »

By the way: yes, this is a real question... who are the people who would have a need to put more than $250,000 into a non-interest-bearing account?
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
cubedbee
Posts: 312
Joined: Tue Aug 04, 2009 11:13 am

Post by cubedbee »

I'm guessing it's businesses, not individuals.
User avatar
Topic Author
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Post by dm200 »

cubedbee wrote:I'm guessing it's businesses, not individuals.
Yes, probably nearly all would be businesses or organizations. Take a church, for example, that has an annual budget of $2 million. [There are many with MUCH larger budgets.] That is about $167,000 per month. Money doesn't come in or go out evenly every week/month. There are peaks and valleys. Such an organization can easily go over the $250,000 mark. The bank may provide services/discounts by having this be non-interest bearing.

In addition, the balance covered (or not covered) by federal insurance is the balance in the bank -- NOT the ledger (checkbook) balance of the organization. So, If the organization writes checks for $100,000 - all of the $100,000 may take days or weeks to clear.
User avatar
Topic Author
dm200
Posts: 23214
Joined: Mon Feb 26, 2007 1:21 pm
Location: Washington DC area

Post by dm200 »

cubedbee wrote:
Scorpion wrote:Sort of on topic, accounts at the same bank entitled in the same name only get $250K of total protection, right? somebody was trying to tell me recently that if you have different accounts (i.e., a checking, a savings, a CD), they are each entitled to $250K of protection.
That somebody is wrong.

http://www.fdic.gov/deposit/deposits/insured/faq.html
Single Account Ownership Category: The FDIC combines all single accounts owned by the same person at the same bank and insures the total up to $250,000.
Let me try to clear up some misunderstandings and (perhaps) misleading statements. As far as the "basic" (now permanent) $250,000 coverage by FDIC (for insured banks/thrifts) and NCUA (federally insured credit unions), for people (not organizations/institutions/etc.), there are several ways that you can get many times the $250,000 coverage.

1. Retirement accounts (most commonly IRAs) have a separate $250,000 FDIC and NCUA limit. This $250,000 has been permanent for several years. (separate from #2 and #3)

2. Individual accounts (single ownership) have a limit of $250,000. (separate from #1 and #3).

3. Joint accounts. EACH owner on a joint account has a separate limit of $250,000 (separate from #1 and #2).

Read all the fine print and explanations at www.fdic.gov and www.ncua.gov.

So, let's take Pat and Chris. Let's suppose they have gobs and gobs of money and want to keep ALL of it at the XYZ Friendly Federal Credit Union (a federally insured credit union). Her is what they have.

Pat: IRA Balance $250,000 (in certificates (CDs)
Chris: IRA Baance $250,000 in certificates (CDs)

Pat: Individual Savings Account Balance $250,000
Chris: Individual Savings Account Balance $250,000

Pat & Chris: Joint Savings Account Balance $500,000

The credit union goes belly up, fails miserably and NCUA liquidates the credit union and sends the money to all account holders.

How much does NCUA send Pat and how much does it send Chris (I am leaving out any special handling of the IRA for illustration purposes).?

Pat gets $750,000 and Chris gets $750,000. A total of $1.5 million. 100% of their accounts was covered by NCUA. If this were the First national Bank of Butte, and it were FDIC Insured, the amounts would be the same.
Scorpion
Posts: 388
Joined: Mon Sep 14, 2009 6:56 am

Post by Scorpion »

dm200 wrote:
cubedbee wrote:
Scorpion wrote:Sort of on topic, accounts at the same bank entitled in the same name only get $250K of total protection, right? somebody was trying to tell me recently that if you have different accounts (i.e., a checking, a savings, a CD), they are each entitled to $250K of protection.
That somebody is wrong.

http://www.fdic.gov/deposit/deposits/insured/faq.html
Single Account Ownership Category: The FDIC combines all single accounts owned by the same person at the same bank and insures the total up to $250,000.
Let me try to clear up some misunderstandings and (perhaps) misleading statements. As far as the "basic" (now permanent) $250,000 coverage by FDIC (for insured banks/thrifts) and NCUA (federally insured credit unions), for people (not organizations/institutions/etc.), there are several ways that you can get many times the $250,000 coverage.

1. Retirement accounts (most commonly IRAs) have a separate $250,000 FDIC and NCUA limit. This $250,000 has been permanent for several years. (separate from #2 and #3)

2. Individual accounts (single ownership) have a limit of $250,000. (separate from #1 and #3).

3. Joint accounts. EACH owner on a joint account has a separate limit of $250,000 (separate from #1 and #2).

Read all the fine print and explanations at www.fdic.gov and www.ncua.gov.

So, let's take Pat and Chris. Let's suppose they have gobs and gobs of money and want to keep ALL of it at the XYZ Friendly Federal Credit Union (a federally insured credit union). Her is what they have.

Pat: IRA Balance $250,000 (in certificates (CDs)
Chris: IRA Baance $250,000 in certificates (CDs)

Pat: Individual Savings Account Balance $250,000
Chris: Individual Savings Account Balance $250,000

Pat & Chris: Joint Savings Account Balance $500,000

The credit union goes belly up, fails miserably and NCUA liquidates the credit union and sends the money to all account holders.

How much does NCUA send Pat and how much does it send Chris (I am leaving out any special handling of the IRA for illustration purposes).?

Pat gets $750,000 and Chris gets $750,000. A total of $1.5 million. 100% of their accounts was covered by NCUA. If this were the First national Bank of Butte, and it were FDIC Insured, the amounts would be the same.
Thanks, this is very helpful. But if we continue with your hypothetical, what if:

A - there is also a checking account entitled "Pat Revocable Trust, Pat as Trustee" with $250K?
B- What if Pat has a checking account with $250K?
C - What if Pat's Trust has CDs (non-IRA) with $250K, in addition to A abovet?

Assume all three additional accounts. My guess as to answers is insurance as to A, no insurance as to B or C. Am I right?

Assume all three additional accounts.
Post Reply