"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:hAnJk.71998$Mh5.48796[at]bgtnsc04-news.ops.worldnet.att.net...
- quote -

FDIC insurance does not cover funds in deposit accounts _in excess of_
stated maximum coverage. The statement quoted above does not address how
that maximum coverage is applied.

Do you get unlimited coverage on money you deposit to a transaction account
even if the bank, unbeknownst to you, keeps it in a sweep account (which is
by law not a transaction account)? If the insurance only applies so long as
the bank doesn't sweep the money to a savings account (which is something
you have no control over), then these accounts aren't really getting more
insurance - at least not insurance the customer can rely on. Unreliable
insurance is no insurance at all.

- quote -

Since the stated purpose of providing unlimited coverage on _all_
non-interest bearing transaction accounts is to protect business payrolls,
and (I don't believe) large businesses tend to use credit union demand
deposit accounts, there would not seem to be a rationale for extending the
unlimited insurance on DDAs to credit unions.

Mark Freeland
nNeEwTs[at]nyc.rr.com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"Mark Freeland" <nNeEwTs[at]nyc.rr.com> wrote in message
news:gd4pq1$duk$1[at]aioe.org...
- quote -

"The ability of Eligible Entities to issue guaranteed debt under this
program would expire on June 30, 2009. Initially, all Eligible Entities will
be covered under this program for a period of 30 days. Prior to the end of
this period, Eligible Entities must inform the FDIC whether they will
opt-out of the guarantee program. If an Eligible Entity opts out of the
program, the guarantee on newly issued senior unsecured debt and
non-interest-bearing transaction deposit accounts will expire at the end of
the 30-day period, regardless of the term of the instrument"

yes, they can opt out. I wonder if a bank opting out will bother to tell
its customers . . .

Second, it applies to all
- quote -

"FDIC insurance covers funds in deposit accounts, including checking and
savings accounts, money market deposit accounts and certificates of deposit
(CDs)."

this is from the FDIC website. Does this cover your concern?

also, does any of this apply to Credit Unions? I see nothing on any of this
new stuff on the NCUA website.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote in message
news:LpPIk.269936$102.3847[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

There may be both more and less to this than meets the eye.

First of all, the extension of insurance is to participating institutions,
which I suppose means that banks aren't required to participate and pay the
10 basis points for the excess insurance. Second, it applies to all
non-interest bearing transaction deposit accounts (aka DDA or non-interest
checking accounts), not just to commercial accounts.
http://www.fdic.gov/news/news/press/2008/pr08100b.html

Third, I've seen nothing describing the interplay between this insurance and
the $250K per depositor limit (e.g. if you have $200K in savings, and $300K
in checking, are you fully insured, or are you first insured for the $300K
in checking, and now having exceeded $250K insurance, uninsured in savings?)

Perhaps most disturbing is that this may all be smoke and mirrors. Banks
typically sweep transaction account funds into "savings" accounts, to avoid
reserve requirements. (See
http://www.newsletterlink.info/nx.as...53-2562-6008-0 or
http://www.stls.frb.org/publications...t_program.html
- banks are required to hold reserves against transaction accounts but not
against savings accounts.)

Since much of the money that you think is in a transaction account really
isn't, it would appear that the money isn't getting this extra insurance.
Smoke and mirrors. I could be wrong - this is from a quick read, and I
haven't really researched sweep accounts. But it is enough to make me
suspicious and ask if others have a better understanding.

Mark Freeland
nNeEwTs[at]nyc.rr.com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

- quote -

Business entities are currently insured ... directed from the FDIC Website:
"Deposits owned by a corporation, partnership, or unincorporated association
are insured up to $250,000 at a single bank, but are insured separately from
the personal accounts of the entity's stockholders, partners, or members."

Jean Keener
Keller, TX
www.keenerfinancial.com

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"Douglas Johnson" <post[at]classtech.com> wrote in message
news:rqt7f4t72db60lfeteftge0mbsf0o72148[at]4ax.com...
- quote -

thanks. I guess that was just sloppy reporting, the way it was worded. I
guess they mean to increase it beyond $250k. I guess.

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

"Gil Faver" <rowdy'sboss[at]xxyz.com> wrote:

- quote -

According to www.fdic.gov corporations, partnerships, and unincorporated
businesses are covered up to $250K per entity. But you don't have to be a very
big company for that to be this week's payroll. -- Doug

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.

I just read that republicans are proposing "Extending government deposit
insurance to business transaction accounts."

does this mean a business entity has no FDIC protection currently?

------ Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.