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Started By
Message
So how does FDIC insurance work?
Posted on 5/4/23 at 1:12 pm
Posted on 5/4/23 at 1:12 pm
Have a 3 month CD with a certain regional bank which may go under soon. 2 months to maturity. Under 250k limit obviously.
Do they automatically give you the principal plus earned interest once FDIC takes bank over or are there hoops to jump through?
Do they automatically give you the principal plus earned interest once FDIC takes bank over or are there hoops to jump through?
4
Posted on 5/4/23 at 1:15 pm to Cosmo
I believe interest would stop accruing at point that the contract is terminated at the time of collapse. FDIC would cover original amount and any interest accrued leading up to the point where bank operations cease.
Posted on 5/4/23 at 1:15 pm to Spasweezy
Right but is it automatic or do I have to do something?
Posted on 5/4/23 at 1:26 pm to Cosmo
Automatic.
What regional are you terrified of failing? There’s a whole lot of media blow up over this right now. Just honestly curious
What regional are you terrified of failing? There’s a whole lot of media blow up over this right now. Just honestly curious
This post was edited on 5/4/23 at 1:30 pm
Posted on 5/4/23 at 1:29 pm to Im4datigers
Isn't it Iberia Bank?
Posted on 5/4/23 at 1:33 pm to Cosmo
These days the way it works is Chase buys your bank and the government gives them $100 billion.
Posted on 5/4/23 at 1:35 pm to Im4datigers
The shorts have the momentum. No regional or non traditional bank is safe.
Bank holding companies are next in the cross hairs once the shorts devour regionals.
Think Charles Schwab - with all the other entires, the feds will expect the holding company to shore up duration loss and slow deposit runs.
Bank holding companies are next in the cross hairs once the shorts devour regionals.
Think Charles Schwab - with all the other entires, the feds will expect the holding company to shore up duration loss and slow deposit runs.
Posted on 5/4/23 at 1:43 pm to Im4datigers
Western Alliance
Posted on 5/4/23 at 1:44 pm to KillTheGophers
quote:
The shorts have the momentum. No regional or non traditional bank is safe.
Yep
The fundamentals of SVB were bad
But the current ones under threat really arent. Its kinda a meme scare/short
This post was edited on 5/4/23 at 1:45 pm
Posted on 5/4/23 at 1:59 pm to Cosmo
I think you would receive correspondence from old bank and acquiring bank on guidelines, but at what speed who knows. I imagine anything up to fdic limits would be settled relatively quickly.
Posted on 5/4/23 at 2:31 pm to Cosmo
quote:
Western Alliance
Why are you concerned they may go under? The bank my former employer uses is a division of Western Alliance.
Posted on 5/4/23 at 2:38 pm to Cosmo
My question about FDIC is why have they not raised the 250k limit?. Hasn’t it been that since 2010?
Posted on 5/4/23 at 2:48 pm to Phate
quote:
Why are you concerned they may go under?
Because every other bank “under pressure” over last few months has
Posted on 5/4/23 at 3:32 pm to Cosmo
quote:
Because every other bank “under pressure” over last few months has
That's four banks total....almost 4900 banks in the US so that's 0.08% of total banks have failed thus far. Media has nothing else to get all lathered up on so May is going to be the month of picking on banks.
Posted on 5/4/23 at 5:20 pm to Cosmo
I have quite a bit of money in CD's from WAL set to expire 9/25.
WAL is getting higher and higher on the hitlist, I've been starting to wonder this same thing.
Seems like until fdic ups their limit or guarantees deposits, or all of sudden we cut interest rates back down to 2%...there's no reason to have money sitting in deposits at any bank other than big 4. The longer the timeline we are in this environment, it will eventually happen to all of them now that the precedent has been set. The question is how long and deep this timeline is. On top of that, the big banks now see, they get sweet deals after collapses so why help beforehand?
The fdic has set a blueprint. Stock holders and bond holders get whiped out, deposits get covered and the buying bank can pick and choose whatever assets they want, and fdic eats the rest. This is basically the blueprint to have no small banks, and specifically because stocks and bond holders get whiped out, you give high incentive to the shorts to go hard at whoever is the next weakest no matter what, and stock price is a part of the banks capital structure as well.
I don't know. It's a bad situation if you want to live in a world where countries have more than a couple of banks.
WAL is getting higher and higher on the hitlist, I've been starting to wonder this same thing.
Seems like until fdic ups their limit or guarantees deposits, or all of sudden we cut interest rates back down to 2%...there's no reason to have money sitting in deposits at any bank other than big 4. The longer the timeline we are in this environment, it will eventually happen to all of them now that the precedent has been set. The question is how long and deep this timeline is. On top of that, the big banks now see, they get sweet deals after collapses so why help beforehand?
The fdic has set a blueprint. Stock holders and bond holders get whiped out, deposits get covered and the buying bank can pick and choose whatever assets they want, and fdic eats the rest. This is basically the blueprint to have no small banks, and specifically because stocks and bond holders get whiped out, you give high incentive to the shorts to go hard at whoever is the next weakest no matter what, and stock price is a part of the banks capital structure as well.
I don't know. It's a bad situation if you want to live in a world where countries have more than a couple of banks.
This post was edited on 5/4/23 at 5:27 pm
Posted on 5/4/23 at 5:33 pm to Pendulum
quote:
This is basically the blueprint to have no small banks
Small banks will always be around, this is just cyclical. Yes a large bank has many benefits, but a small bank has benefits too. In a cycle the small bank benefits will come around and they will grow back again.
Some of these banks portfolio's and business practices were very risky, its not really a surprise its happened. That's just capitalism.
Its certainly smart for everyone to be analyzing their banking right now though if they have anything at risk.
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