Wednesday, March 22, 2006

FDIC Insurance Limit To Go Up...Sort Of.

The FDIC insurance limit is going up to $250,000 on April 1, 2006...on retirement accounts at financial institutions with FDIC coverage. Regular insurance limit stays at $100,000. The best article I could find on the limit increase, was at the Dallas Morning News. One point that I was always confused with in regards to the insurance coverage was what if you had more than $100,000 but spread out across different banks? Well according to the FDIC website:
Basic Insurance Limit Is $100,000 The FDIC insures deposit accounts such as checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs). The basic insurance limit is $100,000 per depositor per insured bank.
Then another section says:
Coverage Over $100,000 If you or your family has deposits at one insured bank totaling more than $100,000, you should know that different ownership categories of accounts are separately insured up to $100,000. You may qualify for more than $100,000 in coverage at one insured bank if you own deposit accounts in different ownership categories.
My interpretation is that if you spread your money across different banks, you are entitled to $100,000 in coverage per bank. So I called...1-877-ASK-FDIC (1-877-275-3342). She confirmed, you are covered separately for each bank. Great news! Don't keep over $100,000 in one bank, unless you have varying account types like joint and single owner. Read more at the FDIC site.

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