What is a bank insurance fund?

Federal Deposit Insurance (FDIC) is an American institution that inspires investors confidence by ensuring funds deposited by citizens in banks and savings organizations. The Banking Insurance Fund (BIF) is one of the FDICs providing deposits. This fund has been made to help the bank's customers if the bank goes bankrupt. Each account holder is entitled to $ 250,000 in the US (USD) if the bank is bankrupt and cannot repay the funds deposited by the account holder. The Banking Insurance Fund does not apply to Thrift organizations; This is covered with another FDIC branch.

The creation of a banking insurance fund began at the end of the 80s. At that time, more than 700 savings and credit banks, known as Thrift Banks, stopped due to bankruptcy. This caused great economic will and to alleviate customer concerns banking was created a fund to ensure investors that their money was safe and helped those who lost money in the bank collapse. FDIC promised to provide us with $ 100,000 for each holderE Account, but this amount increased in 2008 to $ 250,000.

While gentle organizations inspired the Bank Insurance Fund, they are not covered in BIF policy; Instead, for administrative reasons, they are covered by a similar policy called the Savings Bank (SAIF) insurance fund. Thrift Organization or Thrift Bank is a smaller bank that is usually based on the community. Its main function is to provide savings accounts and loans, usually a mortgage for housing. They can also provide services such as checking accounts and credit cards.

FDIC offers types of coverage policies, but the banking insurance fund protects only retail and commercial banks. When these banks become insolvent or bankruptcy, they may not be able to pay their customers a full amount owed on the basis of their account deposits. Instead of merelying customers without their money, the Bank's Fund will pay the differencel between what the bank can pay and how much the account it cost. Each account holder is entitled to up to $ 250,000 per bank. This means that if a person holds an account in two different banks and both goes bankrupt, the account holder is capable of up to $ 500,000.

In 2005, Congress combined BIF and SAIF. This created a single fund of money for both retail and commercial banks and savings banks. Together, these two funds are known as the deposit insurance fund (DIF).