Depositors Insurance Fund (DIF) Provides Protection to Funds to $1 Million for Some Massachusetts Savings Banks

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Many Massachusetts savings banks have additional insurance for deposit amounts to $1 Million from the Depositors Insurance Fund (DIF). Chartered in 1934, no depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

Deposit Insurance FundMany Massachusetts savings banks have additional insurance for deposit amounts above $100,000 from the Depositors Insurance Fund (DIF).  All deposits held in member banks above $100,000 are insured in full by DIF.  The location of the depositor or the branch does not impact the coverage. Thus, a resident of California that wants to open an account at a DIF member bank in Massachusetts is fully covered.  Out-of-state branches of a participating Massachusetts bank are also covered.

DIF not a government program but instead a privately funded program to protect the soundness of Massachusetts banks.  The DIF website states:

"The DIF has over $300 million in assets, plus an additional $100 million of reinsurance. During the recession of the early 1990s, the worst financial period in the history of the Massachusetts savings bank industry, the DIF paid out more than $50 million to protect over 6,500 depositors in 19 failed member banks. Yet the DIF emerged from this period financially stronger than before the recession began."

DIF reviews the financial statements of its member banks on a quarterly basis to ensure their soundness and is "examined annually by the Massachusetts Division of Banks and audited by an independent auditor."

A list of DIF banks is here

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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  • Anette

    January 01, 2009

    $300 million is peanuts. If a medium sized bank went under it could take the whole fund with it. I'd be wary relying on DIF funds above and beyond FDIC insurance.

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