I would like to know why the bank that I go to does not insure anyone for $100,000.00?

Question

I always thought all banks were insured by FDIC. My bank never insured the people for $100,000.00. I'm starting to worry because of the economy. They told me not to worry because the stock and bonds that I have are excellent. What should I do?

Answer 1

All federal banks are FDIC insured.  Credit Unions do not have to follow the FDIC.  Are you a member of a Credit Union?

Answer 2

BANKS MAY BE BUT NOT ALL TYPES OF ACCOUNTS ARE FDIC INSURED

A Guide to What Is and Is Not Protected by FDIC Insurance

So - you feel your cash is safe and protected when you walk through the door of the bank or saving association, much safer than when you kept it under your mattress. And you should. BUT, are your funds all covered by FDIC insurance just because you walked into a secure-looking building with iron bars and guards? Not necessarily - it depends on which of the bank's products you decide to use and whether the bank is FDIC insured.

What Is Insured?

You are probably familiar with the traditional types of bank accounts - checking, savings, trust, certificates of deposit (CDs), and IRA retirement accounts - that are insured by the FDIC. Banks also may offer what is called a money market deposit account, which earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. All of these types of accounts generally are insured by the FDIC up to the legal limit of $100,000 and sometimes even more for special kinds of accounts or ownership categories. For more information on deposit insurance see FDIC brochure "Your Insured Deposits."

What Is Not Insured?

Increasingly, institutions are also offering consumers a broad array of investment products that are not deposits, such as mutual funds, annuities, life insurance policies, stocks and bonds. Unlike the traditional checking or savings account, however, these non-deposit investment products are not insured by the FDIC.

Mutual Funds

Investors sometimes favor mutual funds over other investments, perhaps because they hold promise of a higher rate of return than say, CDs. And with a mutual fund, such as a stock fund, your risk - the risk of a company going bankrupt, resulting in the loss of investors' funds - is more spread out because you own a piece of a lot of companies instead of a portion of a single enterprise. A mutual fund manager may invest the fund's money in either a variety of industries or several companies in the same industry.

Or your funds may be invested in a money market mutual fund, which may invest in short-term CDs or securities such as Treasury bills and government or corporate bonds. Do not confuse a money market mutual fund with an FDIC-insured money market deposit account (described earlier), which earns interest in an amount determined by, and paid by, the financial institution where your funds are deposited.

You can - and should - obtain definitive information about any mutual fund before investing in it by reading a prospectus, which is available at the bank or brokerage where you plan to do business. The key point to remember when you contemplate purchasing mutual funds, stocks, bonds or other investment products, whether at a bank or elsewhere, is: Funds so invested are NOT deposits, and therefore are NOT insured by the FDIC - or any other agency of the federal government.

Securities you own, including mutual funds, that are held for your account by a broker, or a bank's brokerage subsidiary are not insured against loss in value. The value of your investments can go up or down depending on the demand for them in the market. The Securities Investors Protection Corporation (SIPC), a non government entity, replaces missing stocks and other securities in customer accounts held by its members up to $500,000, including up to $100,000 in cash, if a member brokerage or bank brokerage subsidiary fails. For more information contact:

Securities Investor Protection Corporation

805 15th Street, NW Room 800

Washington, DC 20005-2215

202-371-8300

www.SIPC.org

Answer 3

Bank accounts at a bank are insured by FDIC.  You have a brokerage account or other investment account.  If you look closely at the account, you'll see it is not a bank account.  It is under a wholly-owned subsidiary of the bank.  It may have a different type of insurance but not FDIC.  Of course, the investments will go up and down along with the stock and bond markets.

Any savings, checking or CD accounts you have with the bank should be insured.

Answer 4

Banks are insured by FDIC.  Credit Unions by the NCUA.  Stocks and Bonds aren't generally insured, just savings, checking, money-market deposits