GALLUP SURVEY SHOWS IMPORTANCE OF FDIC INSURANCE TO CONSUMERS
With House Financial Services Committee hearings on deposit insurance reform proposals looming, the FDIC released the results of a Gallup survey conducted on its behalf that found more than half of household financial decision-makers take federal deposit insurance into account when considering investments. The poll was conducted late last year before the (hopefully) last downward stock market spasm.
Although more people cited risk and return as factors they use to decide where to invest, 57 percent of respondents said deposit insurance is "very important" in determining where to invest.
Respondents were also asked whether they would be likely to move money to insured deposits if they were nearing retirement and needed to live on retirement income. Six out of ten said they would.
About the same number of respondents, six out of ten, said they would move money to insured deposits in the event of a stock market crash or recession; and the same number said they would be likely to put more of their money into insured deposits if the deposit insurance coverage levels were raised.
Other survey findings: one in eight households keeps more than $100,000 in the bank; about one-third report having more than $100,000 in the bank at one time or another; and the majority of large depositors (households with more than $100,000 in insured deposits) keep money at more than one bank and manage accounts to keep them below $100,000 to ensure they are insured.
Most of the respondents said they would like to see the deposit insurance coverage level keep pace with inflation (77 percent). Half said the current level should be raised; one fourth believes the current level is appropriate and one fourth had no opinion.
These findings bolster ICBA's argument that the current deposit insurance level is inadequate for today's savings needs, particularly as a large percentage of the population approaches retirement age. The findings also illustrate that if insurance levels were increased, depositors would be able to consolidate accounts, keeping more of their money in local institutions where it can be used to support the economic development and lending needs of their local communities.
Tell your elected House member about your own experience, particularly if he or she is on the House Financial Services Committee.
The complete survey results are available on the FDIC's Web site at www.fdic.gov/deposit/insurance/initiative/household/index.html.