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Are you paying FDIC fees?

By David McMillin ·
Friday, July 13, 2012
Posted: 6 am ET

It looks like some banks are attempting to pass on the costs of FDIC insurance to their account holders.

In a release issued to insured institutions, the Federal Deposit Insurance Corp. has warned banks against charging customers an "FDIC fee." The truth is that you may already be paying some fees that help your bank cover its insurance costs, and that's perfectly legal. According to the release, "How an institution decides to cover these costs, either from general revenues or by passing the costs on to customers through fees, is a business decision of the depository institution."

So, in an era where plenty of customers are yelling for transparency about checking account terms and fees, why can't you know if your bank is passing these costs on to you?

First, calling a customer charge an FDIC fee is technically misleading. The FDIC does not impose costs on any individual account holder.

The second reason is more important to bank safety. By calling these out on a customer's statement, the FDIC worries that someone may be able to calculate confidential information about the bank's health.

To instill confidence in the nation's banking industry, the FDIC requires that all insured institutions pay assessments to the Deposit Insurance Fund. When banks fail, that fund covers the costs. However, the assessment rates are not the same for every institution. The FDIC places insured institutions in different categories of risk based on a range of factors. The riskier an institution, the higher its assessment rates.

Allowing customers to calculate those confidential risk ratings -- or even giving them reason to believe that a bank is having trouble -- could lead to serious problems. If account holders received word that their bank is on the brink of failure, the natural concern would be that they might make a run on the bank's deposits.

To get an idea of how healthy your bank is, check Bankrate's Safe & Sound Rating system.

Have you noticed any FDIC fees on your account statements? Did they make you think twice about your bank?

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