Depositors Insurance Fund (DIF) Provides Protection to Funds to $1 Million for Some Massachusetts Savings Banks

Many Massachusetts savings banks have additional insurance for deposit amounts above $100,000 from the Depositors Insurance Fund (DIF). All deposits held in member banks above $100,000 are insured in full by DIF. The location of the depositor or the branch does not impact the coverage. Thus, a resident of California that wants to open an account at a DIF member bank in Massachusetts is fully covered. Out-of-state branches of a participating Massachusetts bank are also covered.

DIF not a government program but instead a privately funded program to protect the soundness of Massachusetts banks. The DIF website states:

"The DIF has over $300 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."

DIF reviews the financial statements of its member banks on a quarterly basis to ensure their soundness and is "examined annually by the Massachusetts Division of Banks and audited by an independent auditor."

A list of DIF banks is here.