Depositor Bill of Rights

by Peter G. Miller
July 29th, 2008

Given the news recently, a lot of people have been wondering just how safe their money is in local banks — and in big, huge banks as well.

Banks are supposed to have significant reserves because there will always be losses. However, when reserves are not enough we have in place a federal insurance program which provides coverage for most borrowers and most deposits, but not all.

“Congress created the Federal Deposit Insurance Corporation in 1933 to restore public confidence in the nation’s banking system,” says the FDIC about itself. “The FDIC insures deposits at the nation’s 8,494 banks and savings associations and it promotes the safety and soundness of these institutions by identifying, monitoring and addressing risks to which they are exposed. The FDIC receives no federal tax dollars — insured financial institutions fund its operations.”

Hold onto the contact information below… just in case.

FDIC’s Depositor’s Bill of Rights

1) You have the right to automatic deposit insurance coverage when you open a deposit account at an FDIC-insured bank, with no additional cost or action on your part.

2) You have the right to separate FDIC insurance coverage for deposits held at different FDIC-insured banks.

3) You have the right to confirm that a bank is insured by using the FDIC’s Bank Find service (www2.fdic.gov/IDASP/main_bankfind.asp) or by calling the FDIC toll-free at 1-877-275-3342.

4) You have the right to deposit insurance coverage of $100,000 for your deposits at an FDIC-insured bank – up to $250,000 for your IRA deposits.

5) You have the right to deposit insurance coverage of more than $100,000 at a single bank when deposits are held in different “ownership categories,” such as a single, joint and trust accounts.

6) You have the right to confirm that your deposits are within the insurance limits by using the FDIC’s Electronic Deposit Insurance Estimator and other online resources at www.fdic.gov/deposit/deposits or by calling the FDIC at 1-877-275-3342.

7) You have the right to be informed when a financial product offered by your bank is not covered by FDIC insurance.

8) You have a right, if your bank fails, to prompt access to your insured deposits.

9) You have the right, if you are an uninsured depositor, to receive distributions from the receivership as the sale of assets permits.

10) You have the right to sleep well, knowing that since the creation of the FDIC 75 years ago, no depositor has ever lost one penny of insured deposits.

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