Deposit Insurance Fund
From Wikipedia, the free encyclopedia
The Deposit Insurance Fund (DIF) is a fund maintained by the United States Federal Deposit Insurance Corporation (FDIC) to insure accounts at member banks and other depository institutions. The FDIC merged the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF) to form the DIF on March 31, 2006 in accordance with the Federal Deposit Insurance Reform Act of 2005. The FDIC maintains the DIF by assessing depository institutions an insurance premium. The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.
A similarly named Depositors Insurance Fund was created by the state government of Massachusetts in response to the large number of Massachusetts bank failures during the Great Depression. The Federal Deposit Insurance Corporation was inspired by this fund. After the FDIC was created, the state fund was modified to cover all amounts not covered by the FDIC. Typically the FDIC covers the first $100,000 of an account; the Massachusetts fund will cover any amount above that. As a result, account holders in Massachusetts banks generally have all of their deposits insured by the combination of the state fund and the FDIC.
