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fdic insurance on almost 2 trillion dollars is scheduled to end for NIBTA accounts.
in order to stabilize the banking system back in 2008 the dodd-frank act called for unlimited fdic insurance on non interest bearing accounds regardless of amount over the 250k limit.
the banking system was flooded with money from nations all over the world,especialy europe who were sending huge somes of money here to keep it safe as well as insured .
that brought in close to 2 trillion dollars and now that act expires 12/31.
as much as 1.4 trillion may be pulled out and find its way into interest bearing stuff now.
bonds and mortgage backed securities may benefit as this money could drive rates on them lower as the money finds home ..
the banking system really had little use for this money since they knew it would be pulled out when it expired so it was difficult to match maturities to loan it out at all.
fdic insurance on almost 2 trillion dollars is scheduled to end for NIBTA accounts.
in order to stabilize the banking system back in 2008 the dodd-frank act called for unlimited fdic insurance on non interest bearing accounds regardless of amount over the 250k limit.
the banking system was flooded with money from nations all over the world,especialy europe who were sending huge somes of money here to keep it safe as well as insured .
that brought in close to 2 trillion dollars and now that act expires 12/31.
as much as 1.4 trillion may be pulled out and find its way into interest bearing stuff now.
bonds and mortgage backed securities may benefit as this money could drive rates on them lower as the money finds home ..
the banking system really had little use for this money since they knew it would be pulled out when it expired so it was difficult to match maturities to loan it out at all.
I think it affects entities with large accounts more than anyone else. For individuals, all it means is keeping multiple accounts under the limit ($250k). So unless you have multi-millions in your account, you don't need to worry.
It really wont effect us much. The wild card is where all that money will end up.
Logic says bonds and mortage backed securities stand a pretty decent chance of getting some of it and those holding those investments might be profiting from it.
I sure hope so ,im holding quite a bit at the moment.
I think it affects entities with large accounts more than anyone else. For individuals, all it means is keeping multiple accounts under the limit ($250k). So unless you have multi-millions in your account, you don't need to worry.
Kind of a worry - for those who would get a much better interest rate at a certain institution (bank or credit union) and would be tempted to put all their eggs in that basket.
The reason there are limits at banks is to keep the banks that are in the worst shape from attracting to much money since they tend to offer the highest rates.
The fdic doesnt want to get killed by having to cover all that money they might attract.
My guess is that the excwess money will be placed in Treasuries or similar safe instruments.
The average person simply has to divide up the money so that there is no more than $250,000 per title account. It is quite easy to have a million or more of money in a bank as long as the accounts are titled correctly. Of course, some banks may place limits on how much money they will accept from a family.
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