Private insurance company ii prioritizes protecting FDIC-insured money. The Deposit Insurance Fund (DIF) refunds financial institution bankruptcy losses. DIF money comes from bank insurance for banks with DIF insurance, and the group includes around 6,000 banks.
Bank customers feel more comfortable keeping their money covered, and the DIF insurance guarantees this. Comparing the DIF account balance to the total assets of the DIF insurance banks included on the quarterly "FDIC Problem Banks List" is a popular usage for it. Also, as it may borrow from the Treasury Department, the FDIC will always have money. Still, significant losses would result in increased premiums for the surviving banks in the coming years.
History Of DIF
Massachusetts' high bank failure rate during the Great Depression prompted the Depositors Insurance Fund. In 1932, the Massachusetts Legislature founded the first two deposit insurers in the nation, the Co-Operative Central Bank and Mutual Savings Central Fund, Incorporated (now the Depositors Insurance Fund).
The Massachusetts Depositors Insurance Fund is influenced by the Federal Deposit Insurance Corporation (FDIC). Once the FDIC was established, the state fund was changed to pay any sums not covered by the FDIC. As an excess deposit insurer, the DIF insurance limits cover the deposits made in member DIF insurance banks that exceed the Federal Deposit Insurance Corporation's (FDIC) maximum.
All of the cooperative banks with DIF insurance in Massachusetts joined the DIF in 2020 when the Co-operative Central Bank amalgamated with it. The Deposit Insurance Fund and the Liquidity Fund make up the Depositors Insurance Fund (often known as the "DIF"). Moreover, the two funds cannot be mixed, and one's assets do not support the other's obligations.
How DIF Protects Finances
The 100% Deposit Insurance safeguards your DIF insurance fund. In the banks with DIF insurance, the DIF covers any deposits above the $250,000 FDIC maximum. Moreover, no residency requirements are needed. The DIF will support you whether you live across state borders, travel, or attend school. Even though DIF is a Massachusetts organization, you don't have to reside there to get insurance. Just use a DIF-member bank.
Other than that, they do not need paperwork, or applications are necessary. DIF coverage begins as soon as you make any deposit. DIF insurance offers protection for all bank deposit account types, including:
- IRAs
- Joint accounts
- Living trust accounts
- Money market deposits
- Certificates of deposit (CDs)
- Checking and savings accounts
- Accounts for businesses and nonprofits
- Government accounts for counties, municipalities, schools, and states
Recent Reforms Of Deposit Insurance Fund
The FDIC's fund management procedures were altered by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act"), which redefined the assessment base and established guidelines for the Designated Reserve Ratio (DRR), which is used to determine DIF insurance banks quarterly assessments.
The FDIC created a thorough, long-term strategy in response to these modifications. The strategy aims to administer the DIF in a manner that minimizes procyclicality, achieves moderate, consistent assessment rates throughout the credit and economic cycles, and maintains a positive DIF insurance fund balance in the case of a banking crisis. Moreover, the FDIC Board approved a 2% DRR and the current assessment rate schedules as part of this proposal.
The FDIC Board must also set an annual DIF target, or DRR, under the Federal Deposit Insurance Act. The Board has maintained a 2% DRR since 2010. Moreover, according to 1950 to 2010 data, the reserve ratio would have needed to be higher than 2% before the start of the two crises over the last 30 years to maintain a positive fund balance and stable assessment rates. The FDIC also considers the 2% DRR a long-term goal and the minimum needed to withstand similar crises.
Members Of DIF
- MountainOne Bank
- Bank of Easton
- Marthas Vineyard Bank
- East Cambridge Savings Bank
- BankProv
- Haverhill Bank
- BankGloucester
- Adams Community Bank
- The Cooperative Bank of Cape Cod
- Mechanics Cooperative Bank
- Coastal Heritage Bank
- Cape Ann Savings Bank
- Abington Bank
- Avidia Bank
- Clinton Savings Bank
- Charles River Bank
- Greenfield Cooperative Bank
- bankHometown
- Dean Bank
- North Easton Savings Bank
- Winchester Savings Bank
- The Lowell Five Cent Savings Bank
- MutualOne Bank
- Rollstone Bank & Trust
- BankFive
- Winchester Co-operative Bank
- The Savings Bank
- Washington Savings Bank
- The Village Bank
- Greenfield Savings Bank
- Lee Bank
- Fidelity Bank
- Florence Bank
- BayCoast Bank
- Hingham Institution for Savings
- Dedham Institution for Savings
- North Shore Bank
- Bank of Canton
- North Brookfield Savings Bank
- North Easton Savings Bank
- Seamens Bank
- Eagle Bank
- Pittsfield Cooperative Bank
- Needham Bank
- Webster Five
- South Shore Bank
- Cornerstone Bank
- Bay State Savings Bank
- Marblehead Bank
- Reading Cooperative Bank
- East Cambridge Savings Bank
- Savers Bank
- Canton Co-operative Bank
- Hingham Institution for Savings
- StonehamBank
- PeoplesBank
- Wrentham Cooperative Bank
- Stoughton Co-operative Bank
- Bluestone Bank
- Webster Five
- North Cambridge Co-operative Bank
- Newburyport Bank
- Greenfield Savings Bank
- Commonwealth Cooperative Bank
- South Shore Bank
- Bank of Easton
- Monson Savings Bank
- Methuen Co-operative Bank
- OneLocal Bank
- bankESB
- Main Street Bank
- Cape Ann Savings Bank
- Monson Savings Bank
- Walpole Co-operative Bank
- Wakefield Co-operative Bank
- Bluestone Bank
- Cooperative Bank
- Webster Five
- The Cooperative Bank of Cape Cod
- North Brookfield Savings Bank
- Dean Bank
- Fidelity Bank
- Walpole Co-operative Bank
- Haverhill Bank
- Florence Bank
- Charles River Bank
- The Village Bank
- Commonwealth Cooperative Bank
- Institution for Savings
- Bay State Savings Bank
- Dedham Institution for Savings
- Needham Bank
- Athol Savings Bank
- bankESB
- Main Street Bank
What If You Have More Than $250,000 In Bank?
Holding $250,000 is possible using DIF insurance. The DIF, an industry-backed private enterprise, insures excess deposits. Following a string of bank failures with Massachusetts charters, the Massachusetts legislature passed a special act in 1932 to establish it.
Designed to provide complete deposit protection for individual and commercial depositors of failing member banks with DIF insurance, the MSCF is the first state-approved deposit insurance fund in the United States. Upon the FDIC's establishment in 1933, the MSCF's charter was amended to provide coverage for deposits over and above the FDIC's coverage limit. Even now, the DIF still insures any deposits made by its member DIF insurance banks that are more than the $250,000 FDIC maximum.
