Hello,

In addition to your insured $100,000, you can put up to $100,000 in a close
relative's names (up to as many close relatives as you have) and get the
same FDIC insurance. I did it to insure my "excess" money. It is called a
Totten Trust and it's optional whether you want to inform your relatives.
Ask your bank.

Cheers, BB

"mick" <micojc[at]yahoo.com> wrote in message
news:1159075534.740887.17700[at]b28g2000cwb.googlegroups.com...
- quote -

I was talking about "compound interest." I thought interest would be
larger because it is being multiplied by a single larger amount rather
than what would happen with 2 separate accounts.

As far as the calculations, I didn't think it was as straightforward as
this; I thought other variables had to be considered, which ones I am
not exactly sure of.

Thanks for all of the help/advice everyone!!!


Douglas Johnson wrote:
- quote -

"mick" <micojc[at]yahoo.com> wrote:

- quote -

What compound effect? If you're talking about compound interest, two accounts
of $100,000 each at 5% will give you the same amount as one account of $200,000
at 5%. Google "compound interest" for lots of calculators and explanations.

- quote -

$100,000 * 0.05 = $5,000. (Interest earned in one year at 5%)
$100,000 * 0.047 = $4,700 (Interest earned in one year at 4.7%)

$5,000 - $4,700 = $300 (Difference)


Me, I'd go looking for two more banks that pay 5% or better and move $100,000
into each. For the most part, when a bank fails, the Feds arrange a take over
by another bank. Depositors don't lose a thing. But why take a chance? There
are lots of banks out there.

-- Doug

The only reason I would add all the $ to a single account would be to
take advantage of the compound effect,

How did you do the calculation to determine how much would be earned at
4.7% vs. 5%?

Thanks!




Andy wrote:
- quote -

mick wrote:
- quote -

Answer: Who knows what it would take for a large bank to go under. But
with so many banks out there offering money market rates of 5% or over,
why take any chances going over the FDIC limit with one bank. When I
checked here:

http://www.money-rates.com/mmarket.htm

I saw 14 banks offering money market rates of 5% or over.

- quote -

Over the course of a year 100K would earn an extra $300 interest at 5%
as compared to 4.7% (100,000*0.003=300). I personally wouldn't pile
more than 100K at one bank to make this extra interest income, but I
would move the $100K from the 4.7% account to one earning 5%+.

Andy

I have a large sum of money in 2 savings accounts from selling a
property. The money needs to remain liquid becuase I intend to
re-purchase property soon.

One savings account earns 5% and I have around $200k in it

The other savings account earns around 4.7% and has around $100k in it

1. I understand that FDIC insures only up to $100k per account; what
would it take for a large reputable bank to go under and me to need to
worry about FDIC insurance?

2. How much of a difference (more $) would I earn if I put the $100k
from the 2nd account into the first account that is earning more (5%)
and already has 200k in it? How much more does the compounding effect
make? Would you do this?

Thanks for any advice!!!!