What’s the DIF? What it Means to be Fully Insured

You’ve probably seen the FDIC logo on banking materials but what does it mean?

The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the US government. Established in 1933 during the Great Depression, the FDIC was founded to insure bank deposits in case the bank failed. It was established to increase the public’s trust in the banking system. Most banks are members of the FDIC, which means they’re able to insure their depositor up to at least $250,000.

What if you have more in the bank than $250,000?

That’s where the Depositors Insurance Fund (DIF) comes in. The DIF is a private, industry-sponsored excess deposit insurance company. Say that 10x fast.

It 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 that FDIC limit of $250,000.

Why aren’t more banks members of the DIF?

The DIF insurance is available only on deposits in 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 protection. You're covered down to the last penny, no extra cost and no matter the account type – personal or business.

If you’ve been with BankProv for a while, you might know we started in Amesbury, MA and you might know we have branches in New Hampshire. So, what does it mean for your money if you bank primarily out-of-state? As a DIF member bank, you’re covered no matter where you are or how you're banking with us. The DIF coverage isn’t affected by where a depositor resides or where a member bank branch is located.

No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

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