Debra A. Simmons, CPA

FDIC $250,000 Insurance Coverage Extended

In Other Items of Interest on September 16, 2009 at 8:24 pm

Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in FDIC-insured institutions. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC was established in 1933, no depositor has ever lost a single penny of FDIC-insured funds.

There is no need for depositors to apply for FDIC insurance or even to request it; coverage is automatic. FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit. FDIC insurance does not cover other financial products that insured banks may offer such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities.

The standard insurance amount currently is $250,000 per depositor. The $250,000 limit is permanent for certain retirement accounts, which includes IRAs. The $250,000 limit is temporary for all other deposit accounts through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except certain retirement accounts, which will remain at $250,000 per depositor.

To ensure funds are fully protected, depositors should understand their coverage limits. The FDIC provides separate coverage for deposits held in different account ownership categories. The coverage limits shown in the chart below refer to the total of all deposits that an accountholder has in the same ownership categories at each FDIC-insured institution. The chart below assumes that all FDIC requirements are met. (For details on the requirements, go to http://www.fdic.gov/deposit/deposits.)

FDIC Deposit Insurance Coverage Limits (Through December 31, 2013):

*Single Accounts (owned by one person) $250,000 per owner
*Joint Accounts (two or more persons) $250,000 per co-owner
*Certain Retirement Accounts (includes IRAs) $250,000 per owner
*Revocable Trust Accounts $250,000 per owner per beneficiary up to 5 beneficiaries (more coverage is available with 6 or more beneficiaries subject to specific limitations and requirements)
*Corporation, Partnership and Unincorporated Association Accounts $250,000 per corporation, partnership or unincorporated association
Irrevocable Trust Accounts $250,000 for the non-contingent, ascertainable interest of each beneficiary
*Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable interest of each plan participant
*Government Accounts $250,000 per official custodian

You can calculate your insurance coverage using the FDIC’s Electronic Deposit Insurance Estimator at http://www.myFDICinsurance.gov. For questions about FDIC coverage, call toll-free 1-877-ASK-FDIC or ask a representative at your bank.

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