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- Americans Are Wrong to Worry About FDIC-Insured Bank Deposits; They Need to Worry About Sales Hustlers Inside those Banks and Short-Selling Barbarians
Americans Are Wrong to Worry About FDIC-Insured Bank Deposits; They Need to Worry About Sales Hustlers Inside those Banks and Short-Selling Barbarians
by Pam Martens and Russ Martens Wall Street on Parade
Federal deposit insurance was created under the Banking Act of 1933 and became effective on January 1, 1934. Since that time, no depositor in a federally-insured bank account has ever lost a dime of their deposits if they stayed within the deposit insurance cap and they made sure that the deposit was actually in a federally-insured instrument.
For example, you can’t buy the corporate bonds of a federally-insured bank and get federal deposit insurance on the bonds. You can’t walk into a federally-insured bank and sit down with a fast-talking insurance salesman and buy an insurance product, such as an annuity, and get federal deposit insurance on the annuity. You can’t walk into a federally-insured bank and sit with a wily securities salesman (a/k/a “wealth advisor”) and get federal deposit insurance on a stock mutual fund he might decide to sell you because it pays him five times the commission of an FDIC-insured Certificate of Deposit.