federal agency managing the bank insurance funds. Accounts are insured up to $100,000 in interest and principal ($250,000 for retirement accounts). As this book was being published, the Bank Insurance Fund and Savings Association Insurance Fund were to be merged into a new entity, the Deposit Insurance Fund. Starting in 2011, the FDIC has the option to raise insurance limits every five years according to changes in inflation. FDIC insurance is mandatory for nationally chartered banks and thrifts and members of the Federal Reserve System.
independent federal agency, established in 1933, that insures deposits up to $100,000 in member commercial banks. It has its own reserves and can borrow from the U.S. Treasury, and sometimes acts to prevent bank failures, for instance by facilitating bank mergers.
federal agency established in 1933 that guarantees (within limits) funds on deposit in member banks and thrift institutions and performs other functions such as making loans to or buying assets from member institutions to facilitate mergers or prevent failures. In 1989, Congress passed savings and loan association bailout legislation that reorganized FDIC into two insurance units: the Bank Insurance Fund (BIF) continued the traditional FDIC functions with respect to banking institutions and the Savings Association Insurance Fund (SAIF) insured thrift institution deposits, replacing the Federal Savings and Loan Insurance Corporation (FSLIC), which ceased to exist. In 2005, Congress passed the FDI Reform Act merging the SAIF and BIF into one insurance fund called the Deposit Insurance Fund (DIF). The same law also raised the federal deposit insurance level from $100,000 to $250,000 on retirement accounts and gave the FDIC the option to increase insurance ceilings on regular bank accounts from $100,000 by $10,000 a year, based on inflation, every five years thereafter starting April 1, 2010.
agency formed as the result of bank failures in the 1930s to insure the deposits of customers of member banks. The FDIC, an agency of the federal government, is self-supporting in that it receives fees from the member banks at the rate of .5% of the bank's deposits and the income from reserves that have been invested. Each account is insured up to $100,000.
a public corporation, established in 1933; insures up to $100,000 for each depositor in most commercial banks and Savings and Loan associations. Has own reserves and can borrow from the U.S. Treasury.
Example: The First National Bank becomes insolvent and cannot pay depositors who want to withdraw their money. The FDIC pays each depositor the full principal amount, up to $100,000, if a merger with a healthy bank cannot be arranged.
