Bank Deposit Insurance - A Safe Investment?

Many large banks now offer additional bank deposit insurance. A lot of overseas bank offer these services as well, but, is the insurance necessary?

FDIC Protection

Many United States banking institution carry FDIC protection. If you are banking with an institution that is not insured, reconsider depositing your money into an account with the FDIC insurance.

The insurance protects your accounts up to $250,000 per account. If you are married, or have joint accounts, there are also established covered premium amount limitations.

Bank Runs and Liquidity
Understanding bank operatations can help you determine the safety of the bank. Bank operation, deposit insurance, and liquidity all determine safety. The banks liquid assets are the established lending funds, which is typically comprised of the total assets of it’s members. When a bank starts to lend money out that is not accounted for, your accounts become risky. You can save yourself a huge crisis later by checking your banks records, looking at public rating information and deciding if the FDIC backing is enough.