Is your bank account being charged for this?
Check your latest bank statement. It's possible you're being charged something new: FDIC Insurance. It's just the latest in a whole series of fees banks are charging their customers. But this one's a bit disturbing.
First of all, banks are indeed adding charges to their checking and savings accounts. They're killing us with fees. If you haven't looked lately, do it now. You may be surprised. I just read that one bank now charges $30 for a bad check. Not yours, someone else's. Someone gives you a check that bounces. It's really not your fault, is it? But your bank charges your account $30. That's just one example.
Monthly fees, per check charges, teller fees (that's right: you get charged for using a teller), all these will add up if you don't stay on top of them. Another example: my son's being charged $40 because his checking account had "low activity."
But the "FDIC Insurance" charge is another thing altogether. Normally, banks pay a "premium" to the "FDIC" because the FDIC "insures" the bank's depositors' accounts. The banks have always paid this themselves. So why are they charging their customers now? Because the FDIC is charging higher premiums and the banks don't want to absorb the cost.
Question: why is the FDIC charging higher premiums? Because they've run out of money. That's the real reason why this is disturbing.
Now you hardly read about this until fairly recently. But the FDIC's been in trouble for a while. Recently, an article in the Wall Street Journal said: "Banks in the U.S. that failed in the past two years were in far worse shape than those that collapsed during the industry's last crisis, a looming problem for the government agency charged with insuring deposits." It then pointed out that 5 banks that recently failed will use up 50% of the remaining FDIC assets.
On the other hand, we've read an analysis that shows that the FDIC, after those failures, is really out of money right now. But whether it's today or a couple of months from now, they will run out of money. Bank failures will not be slowing down this year.
So the FDIC needs more money, and they're charging the banks they insure more money. But that won't be enough to keep the FDIC solvent.
Should you worry? After all, your accounts are "insured" by the FDIC. What happens if they run out of money and your bank fails?
What I think will happen is that the government will simply step in and provide the money the FDIC will need to make sure that the failed banks' account holders are made whole up to the limit of the FDIC insurance (temporarily $250,000).
Of course, the government doesn't have any money itself. So they'll have to print money to save the FDIC. And that's where you'll ultimately take the hit. This will be another chunk of money the government has to create out of thin air to "save" our economy. In the end - someday - we'll face inflation - maybe high inflation. And that's not good.
First of all, banks are indeed adding charges to their checking and savings accounts. They're killing us with fees. If you haven't looked lately, do it now. You may be surprised. I just read that one bank now charges $30 for a bad check. Not yours, someone else's. Someone gives you a check that bounces. It's really not your fault, is it? But your bank charges your account $30. That's just one example.
Monthly fees, per check charges, teller fees (that's right: you get charged for using a teller), all these will add up if you don't stay on top of them. Another example: my son's being charged $40 because his checking account had "low activity."
But the "FDIC Insurance" charge is another thing altogether. Normally, banks pay a "premium" to the "FDIC" because the FDIC "insures" the bank's depositors' accounts. The banks have always paid this themselves. So why are they charging their customers now? Because the FDIC is charging higher premiums and the banks don't want to absorb the cost.
Question: why is the FDIC charging higher premiums? Because they've run out of money. That's the real reason why this is disturbing.
Now you hardly read about this until fairly recently. But the FDIC's been in trouble for a while. Recently, an article in the Wall Street Journal said: "Banks in the U.S. that failed in the past two years were in far worse shape than those that collapsed during the industry's last crisis, a looming problem for the government agency charged with insuring deposits." It then pointed out that 5 banks that recently failed will use up 50% of the remaining FDIC assets.
On the other hand, we've read an analysis that shows that the FDIC, after those failures, is really out of money right now. But whether it's today or a couple of months from now, they will run out of money. Bank failures will not be slowing down this year.
So the FDIC needs more money, and they're charging the banks they insure more money. But that won't be enough to keep the FDIC solvent.
Should you worry? After all, your accounts are "insured" by the FDIC. What happens if they run out of money and your bank fails?
What I think will happen is that the government will simply step in and provide the money the FDIC will need to make sure that the failed banks' account holders are made whole up to the limit of the FDIC insurance (temporarily $250,000).
Of course, the government doesn't have any money itself. So they'll have to print money to save the FDIC. And that's where you'll ultimately take the hit. This will be another chunk of money the government has to create out of thin air to "save" our economy. In the end - someday - we'll face inflation - maybe high inflation. And that's not good.
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