FDIC Redux

[DTS]

$250k

Not to put a damper on the seemingly good news about the $250K insurance, but with the shape this country's in, I would not put my faith in this. Worse case scenario, I doubt there will be enough money to cover all of the deposits. For me, I'll be sticking with the $100K per, regardless.

Thanks,
C. Little

[JohnH]

Good point. I believe the US Government will do whatever is necessary to cover the FDIC limits under any circumstances, but one never knows.

Another issue is the temporary nature of the change that I mentioned in the previous post. Unless you're buying CD's with 14 months or less of maturity, you'd have to consider the possibility of paying a penalty to reallocate in Dec 2009 if the higher limit isn't extended.

A local news story says the meltdown at Wachovia last weekend was primarily caused by a "silent run" on the bank last Friday, with individuals and businesses rushing to get under the $100K limit in the face of all the bad news. I can imagine what things might look like at all the banks in Dec 2009 if the $250K limit is allowed to expire as scheduled. And that isn't an election year, so the politicians might not be so inclined to act, especially since they'll be on vacation. They might handle things more along the lines of the AMT fiasco of Dec 2007.