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Member FDIC and Member DIF
How your Deposits are Insured?
Thanks to a combination of deposit insurance safeguards, each depositor at Salem Five Cents Savings Bank, whether using a physical branch office, salemfive.com or salemfivedirect.com, is fully insured, regardless of the number of accounts or the total funds on deposit.
It works like this: The Federal Deposit Insurance Corporation (FDIC) now insures each depositor, for each ownership category, up to $250,000.
Deposits at Salem Five in excess of the standard insurance amounts provided by the FDIC are covered by the Depositors Insurance Fund (DIF). The DIF is a private, industry-sponsored insurance fund that insures all deposits above FDIC limits at Massachusetts-chartered savings banks. The DIF was established by the Massachusetts legislature in 1932 and has been insuring deposits since 1934. No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.
The result? Your deposits at Salem Five are completely protected – without limitation.
FDIC/DIF FAQs
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I've noticed that my bank displays the FDIC and DIF symbols. What does Member FDIC/Member DIF mean?
Salem Five is a member of both organizations that insure depositors' funds against loss. The first $250,000 per depositor is insured by the FDIC.
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Do all banks offer FDIC and DIF insurance coverage?
No. While there are other insuring entities, only Massachusetts-chartered savings banks offer the additional protection of DIF insurance.
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Are all my deposits at Salem Five insured in full?
Yes. All types of deposit accounts are covered, including savings, checking, and NOW accounts; money market accounts; certificates of deposit; IRAs and Keoghs; and all other deposit accounts held with Massachusetts-chartered savings banks.
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Has any depositor ever lost money in a Member FDIC/Member DIF bank?
No. The FDIC has always paid deposits in full up to its insurance limit. The DIF has always paid all deposits in excess of the FDIC's limit. No depositor has ever lost a penny in an FDIC/DIF member bank since either Fund was established.
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How financially strong are the FDIC and the DIF?
The FDIC is backed by the full faith and credit of the U.S. Treasury. While the DIF is not backed by federal, state, or local governments, the Fund is very strong and has extensive recourses. The banking crisis of the late 1980s serves as a poignant example of the DIF's financial strength. In this period, 18 DIF member banks failed. These banks contained funds from over 6,300 excess depositors. Their excess deposits totaled $250 million. Each and every depositor was paid in full. This was the worst period in the history of the Massachusetts thrift industry, yet the Fund has more money today than it did at the start of the crisis.
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Is the DIF subject to any form of regulatory scrutiny?
Yes. The DIF's financial records are examined regularly by the Massachusetts Commissioner of Banks, and audited annually by an independent auditor.
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If a Member FDIC/Member DIF bank ever got into financial trouble, how would I get my money?
Based on past experience, arrangements would be made for all deposits to be automatically transferred to another bank. All your deposit funds would be available with no interruption of service.
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I'd like to buy a CD for $325,000. Is it fully insured if I place it in one account, or will I need to open two accounts in different names?
You can buy a single CD for the entire amount. At a Member FDIC/Member DIF member bank, your deposits are fully insured, even if they exceed $250,000.
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Does the FDIC or the DIF insure investments in bank mutual funds?
No. Both the FDIC and DIF only cover deposits.
- Where can I learn more about the FDIC and DIF?
Deposit Insurance Coverage (FDIC)
The FDIC insures all deposits.
Watch the video to learn more about how the FDIC insures all deposits, including checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs), up to the insurance limit.
