Weathering the Storm with Deposit Security
In light of current events, consumers and businesses across the country are shaken up when it comes to their hard-earned cash. However, weathering this storm comes down to ensuring customers have a strong knowledge of a financial institution’s deposit security.
Federal Insurance
As a member of the FDIC (Federal Deposit Insurance Corporation) a bank insures each customers’ deposited funds up to $250,000 for each account ownership category. Similarly, credit unions that are members of the NCUA (National Credit Union Administration) automatically provide each member insurance on up to $250,000 per share owner for each account ownership category. This type of coverage is standard across the country without the need for applications of forms, giving institutions that provide additional coverage an opportunity to shine.
Additional Insurance
In Massachusetts, banks who are members of the DIF (Deposit Insurance Fund) provide their customers full insurance on deposits and accrued interest without limit or exception, with the FDIC insuring each depositor to at least $250,000 and the DIF insuring any amount above the FDIC insurance amount. Additionally, credit unions in Massachusetts that are members of the MSIC (Massachusetts Credit Union Share Insurance Corporation) fully insure excess shares and deposits above the NCUA federal insurance limit of $250,000 for all members. Few states have similar organizations, but some financial institutions nationwide have partnered with other private insurers that provide customers additional deposit insurance coverage.
What’s Next?
For Financial Institutions
Messaging is critical for those banks and credit unions providing extra deposit insurance as members of the DIF, MSIC, or a similar partnership! Educating customers on the benefits of any additional protection you provide will strengthen their loyalty to help solidify your future ultimately. Financial institutions who are not members of these organizations should still take steps to create messaging that ensures customers are confident in the future of the bank or credit union. In addition, they should be informed of the protection still provided through the FDIC or NCUA.
For Customers
As a consumer or local business, you must be aware of the protection you have available with your current financial institution. If you’re unsure whether they are a member of the DIF, MSIC, or a similar organization, this information is commonly found on their website, but giving your local branch a call is also an option.
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