I was watching an early morning news show on TV this morning. A law professor was being interviewed and being asked questions relative to the FDIC insurance fund. There were a few times when the newsman referred to the fund as the "bailout fund." He also mentioned the funds were taxpayer funds. All the money in the fund is generated by assessments levied on the insured banks. None of the money is taxpayer money.
With that being said, the fund does need to be shored up. In no way is any depositor's money at risk. But banks will be asked to ante up funds to build the reserve back to appropriate levels. There have been about 100 bank failures which have caused the fund outflow to exceed the inflow.
Remember, all checking accounts and any other account where the interest yield is less than 1/2% has unlimited insurance protection. For accounts paying over 1/2% the limit is $250,000 per account. But the definition of an account is not as clear as we'd like. So if you have over $250,000 on deposit and you are in doubt, have your personal banker explain to you exactly what your coverage level is.
