Quite the sensationalist headline, since the answer was already “no” by the time the article was written. Quick summary: they had a million in deposits, of which $100k is FDIC insured. But Netbank wasn’t a total loss, so the FDIC has already handed over 50% of the amount over 100k. But the headline “firm stands to lose somewhat less than half their cash” doesn’t sound that impressive. And 900K sounds better than 450k. Also I’m sure the editor rejected the first title “idiot stands to pay $450k stupid tax”.
Applied Cognetics, a software development and online marketing firm based in Brooklyn, N.Y., has about $1 million in deposits in NetBank, an online bank with $2.5 billion in assets that regulators closed Friday because of an unsustainable level of mortgage defaults.
Although the FDIC insures bank deposits of up to $100,000, Applied Cognetics president Chris Colthrust and his four business partners aren’t sure what will happen to the remainder of their account.
“Every penny I saved for the last 10 years was in this,” said Colthrust, 39. “Basically all of our operating funds and accounts were in that bank. Everything we’ve worked for the last 2 years [could be] up in smoke.”
I guess I’m big on personal responsibility. And I’d be more sympathetic if I hadn’t heard bad things about Netbank’s stability recently. I don’t exactly live on Wall St, so if I’ve heard it was in trouble that fact shouldn’t surprise anyone. Maybe you should keep an eye on things if it’s that important to you.
There are large banks that cater to businesses that have extra private insurance on their deposits to cover the amount above the FDIC insurance. If you need to keep a cool mil in the bank for some reason, perhaps you should investigate such things.
[...] Hottest Zone wrote an interesting post today onHere’s a quick excerptCould they lose $900K? Quite the sensationalist headline, since the answer was already “no& [...]
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