Modified Payoff

AAA

DEFINITION of 'Modified Payoff'

The partial insurance reimbursement that is paid to depositors of failed banks. Customers who have lost money in excess of what is covered by FDIC insurance can expect to receive a modified payoff. Based on an FDIC estimate of what they could collect from liquidation, a dividend to uninsured depositors would be paid.

INVESTOPEDIA EXPLAINS 'Modified Payoff'

The FDIC instituted the modified payoff in the early 1980s. It was offered in response to a rash of bank failures that led to substantial customer losses.

RELATED TERMS
  1. Bank

    A financial institution licensed as a receiver of deposits. There ...
  2. Federal Deposit Insurance Corporation ...

    The U.S. corporation insuring deposits in the U.S. against bank ...
  3. Broker

    1. An individual or firm that charges a fee or commission for ...
  4. Deposit

    1. A transaction involving a transfer of funds to another party ...
  5. Insurance

    A contract (policy) in which an individual or entity receives ...
  6. Losses and Loss-Adjustment Expense

    The portion of an insurance company’s reserves set aside for ...
Related Articles
  1. The Layoff Payoff: A Severance Package
    Personal Finance

    The Layoff Payoff: A Severance Package

  2. Actively Managed ETFs: The New Mutual ...
    Mutual Funds & ETFs

    Actively Managed ETFs: The New Mutual ...

  3. 2 Indexes That Help Assess Market Behavior ...
    Active Trading Fundamentals

    2 Indexes That Help Assess Market Behavior ...

  4. What are the tax implications of a life ...
    Insurance

    What are the tax implications of a life ...

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center