Q: The FDIC deposit insurance limit was temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009 for all types of deposit accounts. When the FDIC insurance limit returns to $100,000 per depositor, or if it is adjusted to some other amount, how will my DIF insurance coverage be affected?

A: The DIF insures all deposits over the FDIC limit, no matter what the limit. When the FDIC limit returns to $100,000 per depositor, or if it is adjusted to some other amount, DIF insurance will automatically adjust to cover all deposits over the new limit. Regardless of what the FDIC limit is, the combination of FDIC insurance and DIF insurance means that your deposits are insured in full.

Q: Are all types of deposit accounts fully insured in a bank providing both FDIC and DIF insurance?

A: Yes. All types and classes of deposit accounts are covered, including savings accounts, checking and NOW accounts, certificates of deposit (CDs), money market deposit accounts, and retirement deposit accounts.

Q: I am a depositor at an out-of-state branch of a DIF member bank. Are my deposits covered by DIF insurance?

A: Yes. Several DIF member banks have branches in neighboring states. As a depositor in a DIF member bank, your deposits are fully insured. DIF coverage is not affected by where a depositor resides or where a member bank branch is located.

Q: Are there any forms, applications, or special account titles required to receive full deposit insurance?

A: No. There are no forms, applications, or special account title requirements. Full deposit insurance protection works simply. You automatically receive this added insurance benefit when you make any deposit at a DIF member bank.

Q: Does the DIF insure investments in bank mutual funds or annuities?

A: No. Both the FDIC and the DIF insure only bank deposits, and do not insure bank mutual funds or annuity products.

Q: How do I know if my bank provides DIF insurance coverage?

A: Most member banks display DIF signs on doors and at teller stations, and note their membership in advertisements and marketing brochures. Look for “Member FDIC / Member DIF”. If you are not sure, ask a customer service representative.

Q: How financially strong is the DIF?

A: No depositor has ever lost a penny in a bank insured by both the FDIC and the DIF.

The DIF has over $350 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.

Q: Is the DIF a federal or state agency?

A: No. The DIF is a private, industry-sponsored insurance company and is not backed by the federal government or the Commonwealth of Massachusetts.

Q: How are the assets of the DIF invested?

A: Massachusetts law and the DIF’s investment policies restrict the DIF to investments suitable for an organization that insures the public’s deposits, primarily U.S. Treasury and federal agency obligations, and obligations fully guaranteed by the U.S. government. DIF investments are regularly reviewed by its Board of Directors to assure conformity with both the law and DIF investment policies.

Q: Does the DIF monitor the financial condition of its member banks?

A: The DIF receives financial reports from its member banks on a quarterly basis. In addition, formal examinations are conducted regularly by the FDIC and the Massachusetts Division of Banks. The DIF meets regularly with officials of both agencies to review and evaluate the condition of its member banks.

Q: Is the DIF subject to any form of regulatory scrutiny?

A: Yes. The DIF is examined annually by the Massachusetts Division of Banks and audited by an independent auditor.