If you enjoy the convenience and features that Bank5 Connect has to offer, here’s another bonus that comes with our online-only banking – all your deposits are insured in full.
There’s no need to worry that your deposits are at risk at any time. When you place your money in a Bank5 Connect account, you can be assured that every penny is totally covered by deposit insurance.
That’s because Bank5 Connect is a Federal Deposit Insurance Corporation (FDIC) and Depositors Insurance Fund (DIF) member bank. This means each depositor is insured by the FDIC to $250,000. All deposits above this amount are covered by the DIF.
Simply put, there are no gaps in insurance coverage for Bank5 Connect customers’ deposit accounts. That’s about as risk free as you can get.
Plus, there is no dollar limit to the DIF’s coverage – the Fund covers everything above the FDIC limit of $250,000. What’s more, all deposits placed in a Bank5 Connect account are eligible for DIF coverage. That includes checking accounts, savings accounts, and certificates of deposit.
Another great feature of DIF coverage? There are no forms or applications to fill out to receive the insurance. It’s automatic and free.
Since the inception of both insurance programs, no depositor has ever lost a penny of FDIC- or DIF-insured deposits. That in itself is a remarkable track record.
How and why did each program come about? Here’s a quick overview.
The DIF was established by the Massachusetts legislature in 1934 as an alternative to the FDIC. At that time, Massachusetts savings banks, by state law, were not allowed to join the FDIC.
However, the law was changed in 1956 to allow Bay State savings banks to join the federal insurance program. For those that did, the DIF became known as an excess deposit insurer, meaning the Fund insured deposits in excess of the FDIC limit. By 1986, all DIF member banks had joined the FDIC.
Even though state law created the DIF, it is a private deposit insurance company and not backed by the state or federal government.
On the other hand, the FDIC is an independent agency of the United States government that protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the U.S. government.
The FDIC was created as a result of widespread bank failures during The Great Depression in the 1920s and 1930s. In addition to establishing the agency, the Banking Act of 1933 also regulated the volatile banking industry and renewed the public’s confidence in the banking industry. The Banking Act of 1935 made the FDIC a permanent government agency.
So the next time you place money in one of your Bank5 Connect deposit accounts, take comfort in knowing that it has a total blanket of insurance coverage.
You can learn more about the FDIC at its website at www.FDIC.gov.
Additional details about the DIF are available at www.DIFxs.com.