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FDIC Only Insures $44,530.80!
By JLP | August 25, 2007
I have to hand it to Rich over at GetRichSlick for writing FDIC Only Insures $44,530.80, Not $100,000 As You Might Think. According to Rich, FDIC insurance on bank accounts has been stuck at $100,000 since 1980. That’s 27 years! Anyway, check out Rich’s post to read more. It’s a pretty creative way of looking at something we never think about. Good stuff.
Topics: Miscellaneous | 4 Comments »
August 25th, 2007 at 6:52 pm
That is an interesting way to look at it; however, I think it would be more accurate to say that FDIC coverage is $100,000 today, but in 1980, FDIC covered the equivalent of $230,500 in today’s dollars (inflation as measured by CPI has been 130.5% from January 1980).
Here’s why it matters: In a loss, you wouldn’t be shafted by about $55K due to inflation; it’s more like a $130K shaft.
August 25th, 2007 at 8:35 pm
Wow. It kind of reminds me how there are certain parts of the tax code that aren’t indexed to inflation either, like the elderly and disabled care credit or the Saver’s Credit (though supposedly it WILL be indexed for inflation), and LLC/tuition and fees deduction, and it gradually starts screwing people over.
August 26th, 2007 at 2:56 pm
Ah yes, the ole time value of money…luckily (or unfortunately) I don’t have that much stashed away in my bank account..inflation or no inflation
~Raymond
Money Blue Book
August 30th, 2007 at 3:13 am
the math can go either way. FDIC insurance is always $100k in the current year dollars, which means that it really isn’t less than $100k. now if you are comparing money deposited years ago, yes, then it wouldn’t be worth as much in coverage; however, as I said, the insurance is always in current dollars.