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1 reply to this topic
#1
alfie
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- Members
- 1 posts
New Member
Posted 07 December 2005 - 02:12 AM
I am new to this forum so if this is not the right place to post a question please forgive me. I would like to know what DIF stands for as it relates to banking insurance similar to FDIC and how is it obtained or who backs it.
#2
scottjm
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- Members
- 54 posts
Senior Member
Posted 07 December 2005 - 11:43 AM
DIF stands for "Depositors Insurance Fund" Unlike FDIC it is not backed by the Government but I feel very safe leaving large amounts at banks with DIF. Massachusetts has very tough banking laws and DIF is audited by them. DIF was around before FDIC and was the model that FDIC was created from. Below I pasted some info on DIF and you will see that no one has ever lost a penny in a DIF insured bank. I have had one DIF bank fail on me and the very next day my account was just moved to a different DIF Bank. I got this info from the Salem Five site and if anyone is interested they have a great checking account that allows unlimited check writing, free global ATM plus many other benefits. Does require a $200,000 min but is paying 4.38% now and adjusts on the first of every month to the 1-month libor rate posted in the Wall street Journal. If you look at the history of the 1-month libor you will see it stays ahead of our FED Fund rate so this is a great account if your tired of chasing rates
http://www.salemfive...ashAccount.html
It works like this: As in the case of all FDIC-insured banks, the first $100,000 per depositor is covered by the Federal Deposit Insurance Corporation (FDIC). At Salem Five, however, amounts in excess of $100,000 are covered by the Depositors Insurance Fund (DIF). The result? Your deposits are completely protected--without limitation.
The FDIC was established by the U.S. Congress in 1933 with a mission to insure bank deposits. Originally set at $2,500, the FDIC's insurance limit has increased over time to the current coverage of $100,000 per depositor.
The DIF was established by the Massachusetts legislature in 1932 and started insuring deposits in 1934. Today, the DIF is a private insurer covering over $7 billion of depositors' funds in excess of the FDIC limit, in over 100 Massachusetts chartered savings banks.
We are pleased to provide answers to many commonly asked questions surrounding the specific benefits of both the FDIC and the DIF deposit insurance programs.
Questions & Answers
I've noticed that my bank displays the FDIC and DIF symbols. What does Member FDIC/Member DIF mean?
Both organizations insure depositors' funds against loss. The first $l00,000 per depositor is insured by the FDIC. All deposits above this amount are insured by the DIF.
Do all banks offer FDIC and DIF insurance coverage?
No. While there are other insuring entities, only Massachusetts-chartered savings banks offer the additional protection of DIF insurance.
Are all my deposits in Massachusetts chartered savings banks insured in full?
Yes. All types of deposit accounts are covered, including savings, checking, and NOW accounts; money market accounts; certificates of deposit; IRAs and Keoghs; and all other deposit accounts held with Massachusetts-chartered savings banks.
Has any depositor ever lost money in a Member FDIC/Member DIF bank?
No. The FDIC has always paid deposits in full up to its insurance limit. The DIF has always paid all deposits in excess of the FDIC's limit. No depositor has ever lost a penny in an FDIC/DIF member bank since either Fund was established.
How financially strong are the FDIC and the DIF?
The FDIC is backed by the full faith and credit of the U.S. Treasury. While the DIF is not backed by federal, state, or local governments, the Fund is very strong and has extensive recourses. The banking crisis of the late 1980s serves as a poignant example of the DIF's financial strength. In this period, 18 DIF member banks failed. These banks contained funds from over 6,300 excess depositors. Their excess deposits totaled $250 million. Each and every depositor was paid in full. This was the worst period in the history of the Massachusetts thrift industry, yet the Fund has more money today than it did at the start of the crisis.
Is the DIF subject to any form of regulatory scrutiny?
Yes. The DIF's financial records are examined regularly by the Massachusetts Commissioner of Banks, and audited annually by an independent auditor.
If a Member FDIC/Member DIF bank ever got into financial trouble, how would I get my money?
Based on past experience, arrangements would be made for all deposits to be automatically transferred to another bank. All your deposit funds would be available with no interruption of service.
I'd like to buy a CD for $125,000. Is it fully insured if I place it in one account, or will I need to open two accounts in different names?
You can buy a single CD for the entire amount. At a Member FDIC/Member DIF member bank, your deposits are fully insured, even if they exceed $l00,000.
Does the FDIC or the DIF insure investments in bank mutual funds?
No. Both the FDIC and DIF only cover deposits.
Where can I learn more about the FDIC and DIF?
Both the FDIC and DIF maintain websites where you can access additional information. Just click on the links for more information.
http://www.salemfive...ashAccount.html
It works like this: As in the case of all FDIC-insured banks, the first $100,000 per depositor is covered by the Federal Deposit Insurance Corporation (FDIC). At Salem Five, however, amounts in excess of $100,000 are covered by the Depositors Insurance Fund (DIF). The result? Your deposits are completely protected--without limitation.
The FDIC was established by the U.S. Congress in 1933 with a mission to insure bank deposits. Originally set at $2,500, the FDIC's insurance limit has increased over time to the current coverage of $100,000 per depositor.
The DIF was established by the Massachusetts legislature in 1932 and started insuring deposits in 1934. Today, the DIF is a private insurer covering over $7 billion of depositors' funds in excess of the FDIC limit, in over 100 Massachusetts chartered savings banks.
We are pleased to provide answers to many commonly asked questions surrounding the specific benefits of both the FDIC and the DIF deposit insurance programs.
Questions & Answers
I've noticed that my bank displays the FDIC and DIF symbols. What does Member FDIC/Member DIF mean?
Both organizations insure depositors' funds against loss. The first $l00,000 per depositor is insured by the FDIC. All deposits above this amount are insured by the DIF.
Do all banks offer FDIC and DIF insurance coverage?
No. While there are other insuring entities, only Massachusetts-chartered savings banks offer the additional protection of DIF insurance.
Are all my deposits in Massachusetts chartered savings banks insured in full?
Yes. All types of deposit accounts are covered, including savings, checking, and NOW accounts; money market accounts; certificates of deposit; IRAs and Keoghs; and all other deposit accounts held with Massachusetts-chartered savings banks.
Has any depositor ever lost money in a Member FDIC/Member DIF bank?
No. The FDIC has always paid deposits in full up to its insurance limit. The DIF has always paid all deposits in excess of the FDIC's limit. No depositor has ever lost a penny in an FDIC/DIF member bank since either Fund was established.
How financially strong are the FDIC and the DIF?
The FDIC is backed by the full faith and credit of the U.S. Treasury. While the DIF is not backed by federal, state, or local governments, the Fund is very strong and has extensive recourses. The banking crisis of the late 1980s serves as a poignant example of the DIF's financial strength. In this period, 18 DIF member banks failed. These banks contained funds from over 6,300 excess depositors. Their excess deposits totaled $250 million. Each and every depositor was paid in full. This was the worst period in the history of the Massachusetts thrift industry, yet the Fund has more money today than it did at the start of the crisis.
Is the DIF subject to any form of regulatory scrutiny?
Yes. The DIF's financial records are examined regularly by the Massachusetts Commissioner of Banks, and audited annually by an independent auditor.
If a Member FDIC/Member DIF bank ever got into financial trouble, how would I get my money?
Based on past experience, arrangements would be made for all deposits to be automatically transferred to another bank. All your deposit funds would be available with no interruption of service.
I'd like to buy a CD for $125,000. Is it fully insured if I place it in one account, or will I need to open two accounts in different names?
You can buy a single CD for the entire amount. At a Member FDIC/Member DIF member bank, your deposits are fully insured, even if they exceed $l00,000.
Does the FDIC or the DIF insure investments in bank mutual funds?
No. Both the FDIC and DIF only cover deposits.
Where can I learn more about the FDIC and DIF?
Both the FDIC and DIF maintain websites where you can access additional information. Just click on the links for more information.
