Why Are Non Interest Bearing Checking Accounts Preferred

On occassion, I have seen recomendations to transfer Post RV funds into a Non Interest Bearing Checking Account but I don't recall seeing, "WHY" this is a preferred method.

Can anyone kindly advise why s Non Interest Bearing Checking Account would be preferred over an account that "DOES" pay interest.

Any help would be appreciated

Thanks

Yes, they are covered by higher FDIC insurance for the total deposit thru 2012. this was a provision of the frank-dodd bill.

insguy wrote:Yes, they are covered by higher FDIC insurance for the total deposit thru 2012. this was a provision of the frank-dodd bill.

Hi Folks,

I'm posting something I think will help. I opened up "NON-INTEREST BEARING ACCOUNT" at my local credit union and I am posting some documentation which may help confirm the information which has already been posted by some others.

For traditional banks such as BOA, Wahovia etc. those banks are covered by FDIC. For Credit Unions the covcerage is offered through: National Credit Union Share Insurance Fund (NCUSIF), an arm of the National Credit Union Administration (NCUA).

This information posted here comes from my local credit union:
NCUA Insurance

The deposits you have in VyStar Credit Union are insured by the National Credit Union Share Insurance Fund (NCUSIF), an arm of the National Credit Union Administration (NCUA).

The NCUA is an independent agency of the United States Government. NCUA regulates, charters, and insures the nation's federal credit unions. In addition, NCUA insures state-chartered credit unions that desire and qualify for federal insurance. In some states, state-chartered credit unions are required by state law to be federally insured.

Established by Congress in 1970 to insure member share accounts at federally insured credit unions, the NCUSIF is managed by NCUA under the direction of the three-person NCUA Board. The members of the NCUA Board are nominated by the President of the United States of America and confirmed by the Senate. Your insurance is similar to the deposit insurance protection offered by the Federal Deposit Insurance Corporation (FDIC).


NOTICE OF CHANGES IN TEMPORARY NCUA INSURANCE COVERAGE FOR TRANSACTION ACCOUNTS



All funds in a ‘‘noninterest-bearing transaction account’’ are insured in full by the National Credit Union Administration through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to members under the NCUA’s general share insurance rules. The term ‘‘noninterest-bearing transaction account’’ includes a traditional share draft account (or demand deposit account) on which the insured credit union pays no interest or dividend. It does not include any transaction account that may earn interest or dividends, a negotiable order of withdrawal (‘‘NOW’’) account, money market deposit account, and Interest on Lawyers Trust Account (‘‘IOLTA’’), even if share drafts may be drawn on the account. For more information about temporary NCUA insurance coverage of transaction accounts, visit www.ncua.gov.

Enjoy the information. Take Care and God Bless all of you.

Let's hope that we even have to worry about it at some point. GO RV!!!

The Business Bank of Texas was founded in 2007 with the concept of using modern technology to help reduce the cost of doing business and to pass on that savings to our customers. Unlike many banks, we haven’t passed on the cost of providing the base level of FDIC insurance and we haven’t passed on the cost of participating in the TAG program.

Until the law changed in late December, the largest banks in the U.S. chose not to provide TAG protection. When the rules were originally created large banks lobbied congress to allow any bank to opt-out of the program that provided non-interest bearing accounts (which include most business accounts) unlimited coverage in addition to the now permanent $250,000 FDIC coverage. As a result, many of the largest banks didn’t provide TAG coverage. Effective January 1, 2011, the FDIC Board of Directors decided to change the rule and require all insured depository institutions to participate.

The good news is as long as your non-interest bearing accounts are in an FDIC insured institution they will have unlimited protection through December 31, 2012. The bad news is you may be paying higher fees to your bank if it wasn’t participating in the unlimited transaction account guarantee program and now is.

Banks have to pay the FDIC an insurance fee for both base FDIC insurance and the TAG unlimited deposit guarantee coverage. The fee is based on a complex risk formula applied to every insured institution. For some banks the fees can be quite large.

The way many banks pass on their extra costs of doing business to commercial customers is through what is known as “account analysis.” Account analysis is a method that banks use that totals up all the “costs” of providing checking account services to you then gives you credits against the total with offsetting deposits. Other fees many banks charge include charges for each item handled, night depository handling fees, below balance fees for maintaining an account balance below a certain threshold, and fees for providing services like remote check capture, image archiving and ACH debit and credit. Some banks even charge a fee for preparing the account analysis list of fees!

The net result of many bank fees is a high cost for the privilege of keeping your money in their bank.


I ran across this doing some research I hope it helps.

Because until all your investments are in place your bank will only insure up to $250,000 in an interest bearing account. You can insure as much as you want in the millions even in a non interest bearing account. It is called a tag account.

Khoregos wrote:Thank you, Dr Rod, for taking the info and posting it.

The best and most up-to-date information for the days ahead will be at the fingertips of your personal banker...just adding a thought... my disclaimer here, it has been said and I have not verified 1st party...

I have been told that an interest bearing account is insured up to 250,000 per account holder on the account.

http://www.bankaholic.com/finance/fdic-offers-unlimited-coverage-for-non-interest-bearing-accounts-in-2011/

This is a helpful link above is written for the 2011 year...

and from our friendly FDIC:

http://www.fdic.gov/deposit/deposits/insured/temporary.html

Looking forward to some more input here...thanks!

Hi Khoregos,

Thanks for posting those links. It is very helpful for the education and awareness that we all need on our rights and responsibilities as investors and potentially part of those with a bunch of financial blessings...

I have a number of friends who either inherited large sums of money or sold major shares of a business and thus had much money. With proper investment and proper stewardship of funds they have been able to live off the interest and dividends. One of the things (probably the most important thing has been for them the concept of" "preservation of Principal." Thus a friendly piece of advice that I would share with everyone on this quest for knowledge and intel is: the education of your rights and responsibilities and of course the preservation of principal....

Thanks again for your contribution to this site and your positive words.

Thank You Folk's....

I appreciate everyones comments

It's nice to be associated with such learned person (s)

happywelshguy wrote:On occassion, I have seen recomendations to transfer Post RV funds into a Non Interest Bearing Checking Account but I don't recall seeing, "WHY" this is a preferred method.

Can anyone kindly advise why s Non Interest Bearing Checking Account would be preferred over an account that "DOES" pay interest.

Any help would be appreciated

Thanks

OIL MAN with ScottiG and OmniGirl... Saturday 8/20 == 6pm cst Today at 8:09 pm

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[footforward] OKIE OIL MAN will you still get your 15 mins heads up before this goes down?

[so blessed] Okie oil man what should we be looking for?

[OKIE OIL MAN] FOOTFORWARD--I RECEIVED WHAT I NEEDED TO KNOW LATE LAST NIGHT

[procomp1] Okie we all hope and pray this happens on your birthday

[OKIE OIL MAN] SO BLESSED---ON COMING TRAFFIC

[OKIE OIL MAN] PROCOMP1--BEFORE

[OKIE OIL MAN] THNX SCAN

[scotti g] Hey you ole salty dog! Glad to see you here putting smiles on everyones faces!

[papa] OKIE OIL MAN is the fire dept coming out to take care of all those candles on your cake love ya buddy

[OKIE OIL MAN] PAPA--NO BURN LAW NOW IN EFFECT---THAT MANY CANDLES IS PROHIBITED NOW BY LAW

[OKIE OIL MAN] I CAN'T RESPOND TO ALL WHO ADDRESS ME BUT I AM READING

[scotti g] SweetQueen I thought I would fly in wing formation with OKIE OIL MAN

[OKIE OIL MAN] SCOTTI G--YOU OUT ON WEEKEND PAROLE???

[faithblossoms] OKIE: Can you say whats goin on in San Antonio?

[SweetQueen] scotti g I have wings too, so I will fly with both of you.

[OKIE OIL MAN] FAITHBLOSSOMS---NOPE

[so blessed] Okie oil man we looking at mon/tues before your bd

[OKIE OIL MAN] SO BLESSED YEP

[SemperFi] Anyone know about monday being a dayoff in iraq

[OKIE OIL MAN] SEMPERFI--COVER STORY

[dclawson] will monday being a holiday in Iraq makes us wait til Tuesday?

[OKIE OIL MAN] DCLAWSON-NO

[Coleman13] Are we still looking at 25-30 on the Dong?


[OKIE OIL MAN] COLEMAN--I HAVE SAID AND WILL STAY WITH THREE TO THREE AND SEVEN TENTH CENTS ON THE DONG

[ReadytoRetire] OKIE OIL MAN Is there anything that can stop the RV this time???

[OKIE OIL MAN] READYTORETIRE---GOD

[Dinars] OKIE OIL MAN Last I heard, Shabibi was concerned about the market and so was being extremely cautious. So, even though the market dropped Thursday and Friday he was still willing to move forward?

[OKIE OIL MAN] DINARS--ALL WAS SETTLED LAST TUESDAY NIGHT--MARKETS HAVE NO EFFECT NOW


[bboy] OKIE OIL MAN Okie, assuming that IQD is going to be par or better with Kuwait, is Kuwait supposed to rv when IQD rvs???


[OKIE OIL MAN] BBOY-UNKNOWN

[imperium] shooting

[RichGirl] Okie will all banks cash us out or only DB?

[OKIE OIL MAN] RICHGIRL--MULTIPLICITY OF OPTIONS WILL BE AVAILABLE TO YOU

[jonnywg] katt is dong still projected 25-30

[OKIE OIL MAN] JONNYWG--3---TO 3.7 CENTS


[Strangest Secret] OKIE OIL MAN - quick question- want your thoughts on cashing in with USD or CND- for us north of the border=thinking we may catch the swing up on the USD if we cash in with USD? thanks

[feelrod] OKIE OIL MAN any other info regarding UST cashouts

[dinarolk] scotti g Thankyou

[joe9788] OKIE OIL MAN since you were spotted behind bush sr. on the cheney doc. last night, my wife was wondering if you held any position in his cabinet??

[RichGirl] Thank You

[scotti g] dinarolk You betcha!

[OKIE OIL MAN] SECRET--CANADA IS IN BETTER FINANCIAL SHAPE THAN THE USA---YOUR CALL

[footforward] OKIE OIL MAN id agree. probably am biased because im canadian

[junior35] OKIE OIL MAN will dong and dinar be in the same basket?

[OKIE OIL MAN] JOE--PERSONAL FRIENDS ONLY--NO OFFICIAL POSITION


[OKIE OIL MAN] JUNIOR--NO

[scotti g] junior35 I can help in that one! We do not believe so!

[kimberly] trbuck one million dong would be 30 to 37 thousand dollars RV'd at 3 to 3.7 cents

[OKIE OIL MAN] KIMBERLY--YOUR CALCULATIONS ARE CORRECT

[junior35] scotti g OKIE OIL MAN thanks a bunch, look like will be able to double dip then huh?

[OKIE OIL MAN] JUNIOR--TIME ELEMENT MAY NOT PERMIT AND AVAILABILITY MAY BE A PROBLEM---DON'T COUNT ON IT

[Beefjerky] Okie you seem mellower this evening, are you glad it's over?

[OKIE OIL MAN] BEEFJERKY--CERTAINLY RELIEVES A LOT OF PRESSURE TRYING TO KEEP EVERYONE UP TO DATE AND INFORMED

[scotti g] OKIE OIL MAN Talked to banker and he can do what you asked earlier!!!!!!!!

[OKIE OIL MAN] THNX SCOTTI G--IT'S A DATE AND I CONFIRM WITH YOU MY INTENTIONS

[so blessed] Okie oil man you are a god send for us. We would of been lost without you. Thank

[OKIE OIL MAN] SO BLESSED--WE WOULD BE LOST WITHOUT YOU ALSO--YOU ARE JUST AS IMPORTANT AS OKIE AND MAYBE MORESO TO THE LORD

[txgirl] scotti g Can you tell me what banker agreed to do??? or is it just between you guys?

[OKIE OIL MAN] TXGIRL--SCOTTI IS GOING TO FURNISH ME WITH A GAGGLE OF DANCING GIRLS


[SweetQueen] scotti g I'M SO EXCITED... I JUST CAN'T HIDE IT.....

[scotti g] SweetQueen I am ready but I will not dance a jig till I see it in the bank, hear from Bear or I get raptured and then it wont matter!!!!

[crafter] OKIE OIL MAN Thank you for all your work from an old man in Idaho. I only put 1 candle on my B'Day cake after 70

[OKIE OIL MAN] CRAFTER-THEN THAT'S WHAT I WILL DO ALSO
thank thank you

[dinarolk] Okie oil man i want a pic

[OKIE OIL MAN] DINAROLK--LAST PICTURE TAKEN OF ME BROKE THE CAMERA

[Dinars] OKIE OIL MAN I've gotta run, but thanks for answering our questions tonight. Much appreciated.

[OKIE OIL MAN] DINARS--ADIOS

[dannylee] hey omnigirl


[SweetQueen] ANOTHER FLIGHT COMING IN.....

[omnigirl] .................Good AFTERNOON....... THANKS FOR YOUR GREAT NEWS OKIE..... SURE FITS WITH WHAT I HEAR TOO!!! YAY!!!!!.................THE FINISH LINE IS WELL IN VIEW!!!...................................

[dinarup] OKIE OIL MAN I am just getting on chat for today...still trying to find the Cheney article. You sound more matter of fact than ever before Okie. It sounds like we are going to the bank sometime this week, right. Please and TY.

[OKIE OIL MAN] DINARUP-YEP


[4dinar] Okie can you tell us what was said about u being in the back ground while VP Cheney was speaking on the Fox News Broadcast?

[OKIE OIL MAN] 4 DINAR---YES I STATED I WISHED HE WOULD HURRY UP CAUSE I NEEDED TO PEE

[omnigirl] ......................................TIME LINE.... IS.. OKIE WILL HAVE A VERY HAPPY BIRTHDAY.... HE CAN BUY A NEW AIRPLANE...............

[procomp1] okie if your a old dancing man i would bet you love to listen to bob wills

[OKIE OIL MAN] PROCOMP--MY FAVORITE

[golddust2010] when is Okies birthday?

[Finnigan] 24th

[MrsCaptainD] golddust2010 8/24

[golddust2010] when is Okies birthday?

[Finnigan] 24th

[MrsCaptainD] golddust2010 8/24

[OKIE OIL MAN] SWEETQUEEN--YES WE ARE PICKY AND FANATICAL PEOPLE

[cjswest] omnigirl how is Richqueen doing? she busy on the road?

[omnigirl] ........................LAST HEARD SHE WAS SHOVELING YOU KNOW WHAT AT THE STABLE........................

[SweetQueen] OKIE OIL MAN AND DON'T FORGET GOOD AT HEART.....

[Ribeye] OKIE OIL MAN Do you know if we will stand with Isreal?

[OKIE OIL MAN] RIBEYE--IF WE DON'T---WE'RE DOOMED

[omnigirl] .............................SPOKE TO HER TODAY.............SHE IS SUPER!...................

[cincybeliever] omnigirl rate still 5.25 GBP?

[OKIE OIL MAN] RATE IS MID THREES

[cincybeliever] Okie oil man ty

[omnigirl] ...............................................JUST TO BE SURE ..... OKIE.... HAVE A HAPPY BIRTHDAY.... A VERY VERY HAPPY BIRTHDAY...... ....

[SweetQueen] OKIE OIL MAN RICH QUEEN SEND YOU A CHOCOLATE KISS, AND WISHES YOU A "HAPPY BIRTHDAY"

[Ribeye] OKIE OIL MAN What kind of plane should we look for in the sky in your future???

[OKIE OIL MAN] RIBEYE--2 WINGS AND 1 MOTOR AND HOPEFULLY GOING FORWARD

[juicelady] OKIE OIL MAN , OK Okie, here is a question for you. all us ladies have fallen in love with you and we want to know if we will be able to meet you at any of the post RV functions. We all have invisions of what you look like, but we all know what your spirit is all about so it really doesn't matter, but our curiousity and imagination is out of hand.

[OKIE OIL MAN] JUICELADY--I WILL BE THE ONE SMILING THE MOST

[10urout] OKIE: Just got back. Sorry to ask, but is there any news you could recap? Thank You.

[OKIE OIL MAN] 10UROUT--CASE CLOSED--ALL PROBLEMS SOLVED--IT IS FINISHED

[omnigirl] ..................IT IS NOT GRAND? .... ALL ON THE SAME PAGE.... SAME PARAGRAPH.. SAME SENTENCE... SAME WORD....... FINISHED!.....................NOW THAT RINGS A BELL .. EH?

[omnigirl] ........ AS OKIE SAID... THE BELL HAS RUNG.... THAT SHIP HAS SAILED.... THE FINISH LINE IS STEPS AWAY.... AND BEFORE HIS BIRTHDAY.... HOW MUCH BETTER DOES IT GET? DID YOU HEAR THE BELL? WE DID!


[omnigirl] ..........................YOU WILL KNOW RATE SOON ENOUGH..... YOU DO NOT HAVE LONG TO WAIT....