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Massachusetts' Depositors Insurance Fund (DIF) Is Important For High Net Worth Depositors To Consider

Sunday, September 22, 2013 - 4:35 PM
Three Massachusetts banks now offer competitive online savings accounts. Should one rely on the State's Depositors Insurance Fund and deposit amounts over FDIC limits in these banks?

The Depositors Insurance Fund (DIF) was created in 1934 and, while independently operated, includes all Massachusetts licensed banks as members. According to DIF's website, the Fund extends coverage above and beyond FDIC limits to depositors at member banks regardless of their states of residency.
ShorebreakShorebreak2,675 posts since
Apr 6, 2010
Rep Points: 14,526
1. Sunday, September 22, 2013 - 4:38 PM
Q: I am a depositor at an out-of-state branch of a DIF member bank. Are my deposits covered by DIF insurance?

A: Yes. Several DIF member banks have branches in neighboring states. As a depositor in a DIF member bank, your deposits are fully insured. DIF coverage is not affected by where a depositor resides or where a member bank branch is located.
ShorebreakShorebreak2,675 posts since
Apr 6, 2010
Rep Points: 14,526
2. Monday, September 23, 2013 - 10:11 AM
"As a member of both the Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF), your bank provides full insurance for its customers' deposits and accrued interest without limit or exception. Each depositor is insured by the FDIC to at least $250,000. All deposits above the FDIC insurance amount are insured by the Depositors Insurance Fund (DIF)."

It seems to be a good deal; worked well for me when Danversbank was offering (6%, $100K) RCAs.  I had several RCAs with them at that time. 

For now, the three Mass. banks with online savings all have problems (in customer service, fees, or both) one way or another. 

I would still consider APY as the topic selction criteria and the DIF coverage as a nice bonus if the selected account has it.  There are ways to open "various" multiple accounts with high balance and still covered by FDIC; as delineated in Ken's recent blog:   

As I recall, Scott has such (nice) problems with high net worth and he found the best of both world.
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427