FDIC Temporary Liquidity Guarantee Program |
What is the FDIC? |
| The Federal Deposit Insurance Corporation (FDIC) preserves and promotes public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions for at least $250,000 (effective until December 31, 2009); by identifying, monitoring and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails. |
The FDIC has created a new program, the Temporary Liquidity Guarantee Program, for banks who wish to partake in the program. Is NewBridge Bank participating? |
| In order to offer our depositors even greater assurance and security, NewBridge Bank elected to have this coverage, which fully insures non-interest bearing deposit transaction accounts (checking accounts) and transactional deposit accounts earning an interest rate of .50% or less. These accounts will be fully insured by the FDIC until December 31, 2009. Unlimited insurance coverage is available for all non-interest bearing deposit transaction accounts, which are mainly payment processing accounts such as payroll accounts and operating accounts used by businesses. |
How long will the Temporary Liquidity Guarantee Program’s deposit coverage last? |
| The coverage will last through December 31, 2009. |
How does the guarantee on non-interest bearing transaction deposit accounts affect a customer’s insurance coverage for other types of accounts? |
| The insurance coverage on non-interest bearing transaction deposit accounts is over and above the $250,000 in coverage provided to a customer already. For example, if a customer has $500,000 in a non-interest bearing transaction deposit account and $250,000 in a certificate of deposit, the FDIC would fully insure the entire $750,000. |
Does the full deposit insurance coverage for non-interest bearing deposit transaction accounts cover municipal, government deposits, or public funds regardless of ownership? |
| Yes. |
What deposit accounts are included in the definition of a "non-interest bearing transaction account"? |
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A "non-interest bearing transaction account" is defined as a transaction account with respect to which interest is neither accrued nor paid and on which the insured depository institution does not reserve the right to require advance notice of an intended withdrawal. This definition encompasses traditional demand deposit checking accounts that allow for an unlimited number of deposits and withdrawals at any time. This definition does not encompass interest-bearing money market deposit accounts (MMDAs). However, for purposes of the transaction account guarantee program, the FDIC is including in the definition of a noninterest-bearing transaction account:
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For more information, please visit |
| http://www.fdic.gov/regulations/resources/TLGP/faq.html |
