Airstud
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Fdic Insurance And Bank Subsidiaries

Sun Jan 27, 2013 8:22 am

OK, a.net financial experts.

As I understand it, insured deposits at FDIC member banks are insured up to $250,000 per depositor, per institution. So if I put $500,000 into a savings account at Bank of America ('cause investment-wise, that's the right thing to do with $500,000), only $250,000 of it will be insured. And if I think I'm being so smart by opening a checking account at BofA and putting $250,000 in there, or into a BofA CD, then I would in fact be wrong about that smartitude, because the $250K cap applies to all deposits I have at that institution. So I would show marginally more smartitude by putting that other $250K into a account at First Niagara.

Now, what about banks with subsidiaries? If I put $250K into an account at Bank of Albuquerque, and the other $250K into an account at Bank of Oklahoma, are both deposits insured (even though Bank of Albuquerque is owned by BOK)?

Same question would apply about different subsidiaries of the same parent company, e.g. First Nat'l Bank of Colorado and First Nat'l Bank of Kansas; both of which are owned by the First National Bank of Nebraska   
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Dreadnought
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RE: Fdic Insurance And Bank Subsidiaries

Sun Jan 27, 2013 5:15 pm

Quoting Airstud (Thread starter):
So I would show marginally more smartitude by putting that other $250K into a account at First Niagara.

The determination is according to legal entities which are considered to be independent banks by the FDIC. I have not done any research on the banks you mention, but assuming that First National Bank of Nebraska simply owns a majority share of First Nat'l Bank of Colorado, if one or the other fails does not mean the other fails with it. Both would be independent - with completely separate management and accounts. Each bank has its own insurance policy with the FDIC.
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Airstud
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RE: Fdic Insurance And Bank Subsidiaries

Tue Jan 29, 2013 8:28 am

Yeah... I guess my question is, is the separateness of the institution determined by its having its own charter (whether as an NA, FA, FSB, OBE, WKRP, whatev.... or is there something else that establishes separateness for the FDIC's sake.

It is kind of an academic question, as I ain't got no $250K (and wouldn't stash it in a blamed savings account if I did  )

There's just still way too many banks failing these days...
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