Deposit Insurance Fund
Encyclopedia
The Massachusetts 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
of the 1930s. This fund was the inspiration for the formation of the Federal Deposit Insurance Corporation
(FDIC). 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 $250,000; 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.
This fund is related to, but not the same as, the national Deposit Insurance Fund (DIF) administered at the U.S. national level by the FDIC.
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
government of Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
in response to the large number of Massachusetts bank failures during the Great Depression
Great Depression
The Great Depression was a severe worldwide economic depression in the decade preceding World War II. The timing of the Great Depression varied across nations, but in most countries it started in about 1929 and lasted until the late 1930s or early 1940s...
of the 1930s. This fund was the inspiration for the formation of the Federal Deposit Insurance Corporation
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is a United States government corporation created by the Glass–Steagall Act of 1933. It provides deposit insurance, which guarantees the safety of deposits in member banks, currently up to $250,000 per depositor per bank. , the FDIC insures deposits at...
(FDIC). 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 $250,000; 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.
This fund is related to, but not the same as, the national Deposit Insurance Fund (DIF) administered at the U.S. national level by the FDIC.