What’s Deposit Insurance? What it Means to be Fully Insured
When you deposit your hard-earned money into the bank, one of your top priorities is ensuring its safety. That’s where deposit insurance comes into play. Deposit insurance is a safeguard that protects your money in the unlikely event of a bank failure. It’s a crucial part of our financial system, offering peace of mind to individuals and businesses alike.
What is FDIC Insurance?
You’ve probably seen the FDIC logo on banking materials, but do you know what it really means?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the US government that protects deposits at member banks. Established in 1933 during the Great Depression, the FDIC was designed to restore the public’s trust in the banking system. Today, FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category.
This means if a bank fails, the FDIC steps in to reimburse depositors (YOU) up to the insured limit. It’s important to note that FDIC insurance covers checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs). However, it does not cover investments such as stocks, bonds, mutual funds or life insurance policies. Read more about FDICs Deposit Insurance.
What if you have more deposits at BankProv than $250,000?
That’s where the Depositors Insurance Fund (DIF) comes in. The DIF is a private, industry-sponsored deposit insurance fund. DIF insurance goes beyond the $250,000 FDIC limit, providing full insurance of all deposits above that threshold for member institutions. This means that depositors at DIF-member banks enjoy FULL coverage, regardless of the amount in their account.
DIF is unique to Massachusetts and has been protecting depositors since 1934. No depositor at a DIF-member bank has ever lost a penny.
History of the Depositors Insurance Fund (DIF)
The DIF was created by a special act of the Massachusetts legislature in 1932 after a spate of Massachusetts-chartered bank failures. The Massachusetts state legislature voted to create the Mutual Savings Central Fund (MSCF), now known as the Depositors Insurance Fund (DIF).
As the US’s first state-sanctioned deposit insurance fund, the MSCF was designed to provide full deposit protection for individual and business depositors with failed member banks. After the creation of the FDIC in 1933, the MSCF’s charter was modified to cover deposits above and beyond the FDIC’s coverage limit.
Today, the DIF continues to insure all deposits for its member banks that exceed the FDIC limits.
Why Don’t All Banks Have DIF Insurance?
Not all banks offer DIF insurance because it’s specific to Massachusetts-chartered savings and co-operative banks. As a member of both the FDIC and the DIF, we’re able to provide our deposit clients with full deposit insurance. You're covered down to the last penny, no extra cost and no matter the account type – personal or business.
Not in Massachusetts? You can Still Benefit from Deposit Insurance
You don’t need to live in Massachusetts to benefit from DIF Insurance. As a Massachusetts based bank offering online banking services, we allow depositors from across the country to access DIF-insured accounts. BankProv, originally founded in Amesbury, MA, now operates seven branches across Northeastern Massachusetts and Southern New Hampshire. However, DIF coverage isn’t limited by where a depositor resides or where a branch is located. Whether you bank with us online or in person, your deposits are fully insured above FDIC limits, offering you peace of mind no matter where you are.
Take the Next Step: Open a Business Checking Account
Whether you’re a small business owner or managing a larger enterprise, protecting your funds is crucial. At BankProv, we offer business checking accounts with both FDIC and DIF insurance, ensuring your deposits are fully protected. Our accounts come with features designed to streamline your financial management, from cash management services to seamless online banking.
Experience peace of mind and enhanced financial security by opening a business checking account today. Let us help you safeguard your business’s future while providing the tools you need to grow.