WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) Board of Directors today released the first semiannual update of 2024 on the Restoration Plan for the agency’s Deposit Insurance Fund (DIF). Staff project that the reserve ratio remains on track to reach the statutory minimum of 1.35 percent ahead of the deadline of September 30, 2028. 

“Reaching the statutory minimum reserve ratio in advance of the statutory deadline strengthens the DIF so that it can better withstand unexpected losses and reduces the likelihood of pro-cyclical assessment increases.”, said FDIC Chairman Martin J. Gruenberg.

As of December 31, 2023, the DIF reserve ratio was 1.15 percent, up from 1.11 percent as of June 30, 2023.  The fund balance stood at $121.8 billion at the end of the year. Growth in the DIF balance in the second half of 2023 outpaced insured deposit growth, resulting in the increase of the reserve ratio. 

On September 15, 2020, the FDIC established the Restoration Plan to restore the DIF reserve ratio to at least 1.35 percent by the statutory deadline, after extraordinary deposit growth during the first half of 2020 caused the DIF reserve ratio to decline below the statutory minimum of 1.35 percent. The Plan maintained the assessment rate schedules in place at the time. 

On June 21, 2022, based on projections indicating that the reserve ratio was at risk of not reaching the required minimum by the statutory deadline, the FDIC Board amended the Restoration Plan. In conjunction with the Amended Restoration Plan, the FDIC Board increased deposit insurance assessment rates by 2 basis points for all insured depository institutions, effective in the first quarterly assessment period of 2023. 

The Federal Deposit Insurance Act (FDI Act) requires that the FDIC Board adopt a restoration plan when the DIF’s reserve ratio—the ratio of the fund balance relative to insured deposits—falls below 1.35 percent.