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Ininsured savings

Is it safe to deposit funds in a savings institution which is not a member of FDIC or FSLIC? I recently put $30,000 in a local bank and later found they were not a member of FDIC. They state, however, that all deposits are insured. What does that mean? T.D.

Numerous insurers back up deposits other than FDIC and FSLIC, which are corporations formed by the US government in 1934 to avoid bank and S&L panics similar to those that plagued the early 1930s. Some states offer insurance to state-chartered banks and S&Ls within their borders. Some states' credit unions band together to offer insurance cooperatively. But, any insurance is only as good as the strength of the organization issuing coverage.

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"Moneywise" receives many questions about the safety and security of FDIC and FSLIC. These appear to be as good as the US government, but you'll have to evaluate the backing of the insurance where you placed your $30,000 in deposits. Presumably you placed your deposits in the savings institution not a member of FDIC or FSLIC to gain a higher rate of return.Only you can judge any additional risk involved in placing deposits with an institution with non-FDIC-FSLIC coverage. If security is your primary aim, as distinguished from a higher return, I suggest sticking with those institutions insured by FDIC or FSLIC or buying US government debt instruments directly.

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