Are you prepared for bank bail-ins

Recently the FDIC had a large meeting discussing the upcoming inevitable bank bail-ins that are coming. Not bailouts, like in the 2009 housing bubble, these will be bail-ins. What is a bail-in you ask? Well in short, a bail in is when the bank use all uninsured deposits and convert it to equity to cover their arses. So my message to all is to ensure that you have no more money in one bank than the FDIC insured limits, which in the USA is $250,000 per person per institution.

www.investopedia.com...

a reply to: panoz77

That would definitely suck. The FDIC limits are $250k per bank, per ownership category, so a joint account would be another ownership category as would a business account or trust account, so it's common to have coverage exceed the $250,000.

FDIC

I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

originally posted by: network dude
I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

Get married and have children?

a reply to: panoz77

Well I guess most are just going to sit in their easy chairs and wait for Jones.

originally posted by: peter_kandra
a reply to: panoz77

That would definitely suck. The FDIC limits are $250k per bank, per ownership category, so a joint account would be another ownership category as would a business account or trust account, so it's common to have coverage exceed the $250,000.

FDIC

Not unless something changed.

From FDIC on joint accounts
"JOINT ACCOUNTS (12 C.F.R. § 330.9)
I. Definition
A joint account is a deposit owned by two or more individuals that satisfies the requirements set forth below.
II. Insurance Limit
Each co-owner of a joint account is insured up to $250,000 for the combined amount of his or her interests in all joint accounts at the same IDI. In determining a co-owner’s interest in a joint account, the FDIC assumes each co-owner is an equal owner unless the IDI records clearly indicate otherwise."


From your link if you follow to joint accounts:
"

A deposit account owned by two or more people, without named beneficiaries. To qualify for coverage, all owners must:

Be living people
Have equal rights to make withdrawals
Self-directed Keogh plan accounts
Sign the deposit account signature card (unless the account is a CD). Electronic signatures meet this requirement.

Blue Shield
Coverage Limit: Each co-owner's shares of every joint account at the same insured bank are added together and insured up to $250,000."
www.fdic.gov...

originally posted by: dandandat2

originally posted by: network dude
I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

Get married and have children?

well, if you are going to spill the beans for free, WTF am I going to do now?

I use credit cards for purchases and pay them off when the eagle deposits into my bank account once a month. Leaves me with $25.

originally posted by: network dude
I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

I have a technique as well, stay broke and you'll never get raped by the bank.
2nd.

a reply to: panoz77

I guess there's conflicting info then (go figure) because this blurb identifies joint as a separate ownership category:

Q: What is the difference between “deposit products and “ownership categories”?

A: Deposit products include checking accounts, savings accounts, CDs and MMDAs and are insured by the FDIC. The amount of FDIC insurance coverage you may be entitled to, depends on the ownership category. This generally means the manner in which you hold your funds. Some examples of FDIC ownership categories, include single accounts, certain retirement accounts, employee benefit plan accounts, joint accounts, trust accounts, business accounts as well as government accounts.

My main point was that the $250k limit can be exceeded in multiple ways. Just a husband and wife having separate accounts makes it $500k total for them. Add in a trust account POD to a kid or grandkid and there's another $250k. Have a business...that's another $250k. If that's too much risk for someone at one bank, open up additional accounts at another bank.

In reality, people with assets over $250k likely have the overage in brokerage or other accounts.

I wouldn't worry about the $250k limit too much. (Although if you have that much money, you're a fool if you keep it all in one bank.)

If they really are planning for bail-ins, they'll probably replace your savings with treasury bonds that won't mature for 30 years. Or something similarly evil that gives those responsible plenty of time to walk away from the wreckage they create.

originally posted by: Asktheanimals

originally posted by: network dude
I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

I have a technique as well, stay broke and you'll never get raped by the bank.
2nd.

damnit, I can't catch a break. A guy tried to make a few bucks and everyone wants to bust in and tell all the secrets.
Now I gotta eat Ramen again.

originally posted by: AndyFromMichigan
I wouldn't worry about the $250k limit too much. (Although if you have that much money, you're a fool if you keep it all in one bank.)

If they really are planning for bail-ins, they'll probably replace your savings with treasury bonds that won't mature for 30 years. Or something similarly evil that gives those responsible plenty of time to walk away from the wreckage they create.

Actually I heard a rumor the plan is to issue bank shares. If they are taking your money to keep them above water who the heck would want shares in that bank.

This is why I can see them doing it.

I also heard a rumor that the FDIC can only cover like 1% of all deposits. So if your bank bails in and then ultimately goes under, the game of musical chairs will be 1 in 100 of ever seeing your money again.

FDIC 2022-2026 Strategic Plan

The DIF balance has risen every quarter since the end of 2009, and stood at a record $119.4 billion on March 31, 2021, up from $110.3 billion at the end of 2019. The reserve ratio stood at 1.25 percent at March 31, 2021, down from 1.41 percent at the end of 2019.

Extraordinary growth in insured deposits during the first and second quarters of 2020 caused the reserve ratio to decline below the statutory minimum. As of June 30, 2020, the reserve ratio stood at 1.30 percent. On September 15, 2020, the Board adopted a Restoration Plan, as required by the FDI Act, to restore the DIF to at least 1.35 percent within eight years. Under the Restoration Plan, the FDIC maintained the schedule of assessment rates in place at the time for all IDIs and is monitoring deposit balance trends, potential losses, and other factors that affect the reserve ratio. Staff must update the Board at least semiannually. The most recent update was provided on June 15, 2021.

It's estimated Americans have 9 trillion in the bank, with 119.4 billion in insurance available.

Fun times.

originally posted by: Asktheanimals

originally posted by: network dude
I strategically made decisions that limit my bank holdings below the threshold. For a fee, I can share the technique.

I have a technique as well, stay broke and you'll never get raped by the bank.
2nd.

My technique too...it's flawless!

It's been working for over 35 years now!

a reply to: panoz77

Wouldn’t this cause people to get scared pulling cash out and hiding it under their beds?

People with an excess of 250k should know how to move it around, after all they didn’t make that type of money being stupid. And the government knows that so what’s their next move?

a reply to: 38181

Try to go into the bank and withdraw 5k in cash.

I'll bet they will tell you they don't have it on hand and need to order it, come back in 3 days. This happened to me, I was buying a used car and the guy said cash only. Luckily he was cool and held it for me for the 3 days. Not only that, the bank was trying to get me to use a cashiers check and I told them the guy wanted cash only. They seemed ticked off like I was taking the money out of their pocket.

What if you come back in 3 days and they tell you it's going to be another 3 days, then another 3 days ect ect. Then you go back one day and the bank is closed.

a reply to: panoz77
The usual practice is for the FDIC to find a bank to take over the accounts.
They may change the interest rate values of the customer products to make the math work but its not just money wasted covering deposits that way.
You can check out your banks health pretty easily a Texas ratio in the single digits is a a good sign.
There are a lot of junk bonds out there that are a lot more difficult to audit though.
The Lehman Brothers sub prime dump back in 2008 was the catalyst for that recession.
If you are playing the 10% bond interest/dividend game you should be doing a little investigating.
That is where the problems are likely to occur, not FDIC audited banks.

If I had a quarter million in the bank I wouldn't be worried about a bank collapse- I'd be building a bunker

Most people I know don't have two paychecks to rub together, let alone ten grand.
250 grand would pay off my mortgage with enough left over to buy av clapped out plow truck

a reply to: litterbaux

This just happen to us as well...Also a family member needed some cash so we tried to deposit into his account at the bank ...sorry but we don't take cash here (mind you not a small bank chain either)....had to go buy a damn money order ...WTH

a reply to: Bordon81

So by going off what you say, Blackrock will control the world soon enough.