If FDIC did not exist...

Without FDIC/NCUA I/we would...

  • Do nothing differently

    Votes: 25 32.9%
  • No longer purchase CDs

    Votes: 10 13.2%
  • Keep less in the bank/CU

    Votes: 30 39.5%
  • Keep nothing in the bank/CU

    Votes: 4 5.3%
  • I like bacon

    Votes: 28 36.8%

  • Total voters
    76
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I don’t really get the point of this thread.
The point is that FDIC has come up in the news recently. So, I'm curious to what extent FDIC influences your decision on where you keep your cash? Likewise the extent to which FDIC influences whether you choose to invest in CDs?

For me/us, though BofA and JPM provide convenience and a number of services that we find extremely useful, having the sense of security which FDIC provides is a significant factor why we have any money sitting in accounts with them. It's why I keep any money in their 0.01% savings accounts. Take away FDIC, and it less enticing than my Fidelity CMA.

As for CDs, personally, without FDIC, I do not see any need for them. May as well buy the bank's bonds.
 
To be clear - the recent talk was about whether the Federal Deposit Insurance Corporation (FDIC), the organization itself, could be absorbed into the Department of the Treasury to improve administrative efficiency and reduce costs. There has NOT been talk of eliminating deposit insurance. To imply otherwise is irresponsible fearmongering.
 
I’m not worried about closure of FDIC as has been commented several times the recent news was about consolidation of bank regulators. I’m just a Joe and can think of FDIC, Federal Reserve, Comptroller of Currency, and others that all regulate different banks.

Many years ago we separated our $ savings into a bank and 2 credit unions. Then added to that Fido. If one was to fail or restrict access we have alternatives.
 
Removing the FDIC insurance would be a great disservice to anyone who has multiyear CD's at banks. By creating the FDIC in 1933, the government has said for nearly 100 years your money is safe in a bank, as long as you don't have more than the limit. In 2008 when at least one money market fund broke the dollar, the government stepped in to limit the risk. I've been investing in CD's for nearly 50 years now. Imagine how you would feel if you've been paying for life insurance for that period of time, and suddenly you find out your life insurance company went out of business.
Why would that mean that existing CD's wouldn't be covered.

Let's assume they would be. On a go forward basis, how would your behavior change if (for example), FDIC insurance was limited to the following?
100% for depositors whose income was less than 50K
95% for depositors whose income was 50K-100K
90% for depositors whose income was 100K-150K
85% for depositors whose income was 150K-200K
80% for depositors whose income was greater than 200K
 
I'll join the others that don't understand why this is a topic for discussion but my answer would be that the FDIC organization could go away and it would not affect me. I can see where folks who keep money in a bank might be affected if deposits were not insured.
 
I would be kicked off this forum if I gave you an honest answer to your question.
:)

My post was just trying to handle the "poor people don't know how to manage investment risk" thesis while the allowing for the "rich folks shouldn't be bailed out" theme. That is, we don't want Grandma to lose her savings or stand in line to get money from the bank but you well-to-do folks hanging out on ER.org shouldn't have your bad investments fully backed by the taxpayers. :)

I know better than to think FDIC insurance is going away. Just like I know better than to think our ever growing government debt and off book obligations are going away. They won't, because the easiest course (politically) is to not solve those problems, but instead to print money. $36.2 Trillion and counting (federal debt, 272K per taxpayer), and bunches more in unfunded liabilities (the FDIC would become one if there were massive bank failures).

That's why close to 15% (and climbing) of my net worth is in precious metals/miners/real estate other than my primary residence.
 
I've been involved in FDIC audits at Megacorp. I'd not like to see their oversight changed. They're a bunch of nosey people.
 
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