Will public funds held in non-interest bearing transaction deposit accounts that are collateralized with pledged securities be included in the amount assessed for the guaranteed additional insurance?
Yes. For public fund depositors, do banks only need to pledge on balances over the $250,000 and not in NOW accounts (earning less than 0.5 percent)? Suppose the institution does not opt out and the depositor has full FDIC insurance coverage on his/her NOW account. Does the institution need to pledge against that part of their aggregate balance that is already covered by FDIC insurance? The FDIC will protect public deposits up to the $250,000 limit under its ordinary deposit insurance rules. In addition, the FDIC will protect NOW accounts in full if the interest rate does not exceed 0.5 percent under the Temporary Liquidity Guarantee Program (assuming no opt-out). If a participating institution is required to pledge collateral for public deposits, this requirement is imposed by state law and not by the FDIC’s regulations. The amount of collateral would depend upon the wording and meaning of the state law. Any questions about the meaning of the applicable state law should be presented to
Related Questions
- Will public funds held in non-interest bearing transaction deposit accounts that are collateralized with pledged securities be included in the amount assessed for the guaranteed additional insurance?
- Are balances in non-interest bearing transaction accounts included in the overall $250,000 FDIC coverage amount?
- Is there any daily transaction limit for the deposit made to or funds withdrawal from RMB accounts?
