FDIC Insurance - Update
Effective May 20, 2009
The FDIC has approved extending coverage on deposits at FDIC-insured institutions to $250,000 per depositor through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except for IRAs and other certain retirement accounts which will remain at $250,000 per depositor.
The extension announced on May 20, 2009, does not apply to the Transaction Account Guarantee Program (see below for complete details). The unlimited coverage under the Transaction Account Guarantee Program is only in effect for depositors at participating institutions through December 31, 2009.
FDIC Insurance OverviewAs your financial advisor, we are here to help make sure your deposits are safeguarded with FDIC insurance. Your banker is experienced in how to configure your accounts to maximize your FDIC protection. In addition, your banker is trained on the recent updates to FDIC insurance and can explain how these changes may affect your accounts. Below is an overview of the most recent changes put in place by the FDIC:
1) The standard insurance amount currently is $250,000 per depositor. The $250,000 limit is permanent for IRAs and other certain retirement accounts. 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 IRAs and other certain retirement accounts, which will remain at $250,000 per depositor.
2) Unlimited deposit insurance coverage is available through December 31, 2009, for non-interest bearing transaction accounts, regardless of dollar amount, at institutions participating in FDIC’s Transaction Account Guarantee Program. (see below for complete details)
FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs). FDIC insurance does not, however, cover other financial products and services that insured banks may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities.
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 bank. The chart shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met.
Basic FDIC Deposit Insurance Coverage Limits
| Single Accounts (owned by one person) |
$250,000 per owner
|
| Joint Accounts (two or more persons) |
$250,000 per co-owner
|
| IRAs and certain other retirement accounts |
$250,000 per owner |
| Trust Accounts |
$250,000 per owner per beneficiary subject to specific limitations and requirements |
Corporation, Partnership and Unincorporated Association Accounts
|
$250,000 per corporation, partnership or unincorporated association |
| Employee Benefit Plan Accounts |
$250,000 for the non-contingent, ascertainable interest of each participant
|
| Government Accounts |
$250,000 per official custodian |
| Non-interest Bearing Transaction Accounts |
Unlimited coverage – only at participating FDIC-insured banks and savings associations | By consulting with your banker, you can ensure that you are taking full advantage of FDIC insurance coverage on your deposits. In fact, coverage may be extended far beyond $250,000 by structuring your accounts to maximize your coverage.
See the example below of how a husband and wife structured their accounts to have their accounts FDIC insured up to $2,000,000.
HUSBAND & WIFE
| Individual Accounts: |
|
| Husband |
$ 250,000 |
| Wife |
$ 250,000 |
|
|
| Joint Tenancy (with right of survivorship) |
|
| Husband & Wife |
$ 500,000 |
|
|
| Revocable Trust Accounts: |
|
| Husband as Trustee for Wife |
$ 250,000 |
| Wife as Trustee for Husband |
$ 250,000 |
|
|
| Certain Retirement Accounts: |
|
| Husband |
$ 250,000 |
| Wife |
$ 250,000 |
|
$2,000,000 |
Home Federal offers an additional service called the Certificate of Deposit Account Registry System (CDARS), a convenient solution for large deposit investors. CDARS members enjoy full FDIC insurance on deposit amounts larger than $250,000 by breaking down the large deposit into smaller amounts and placing them in the CDARS network. Contact your banker if you are interested in learning more about this service.
We invite you to follow the link below to view a six-minute video that provides a detailed explanation of FDIC insurance coverage in relation to your deposit accounts.
*Video provided by BVS
Informational video about FDIC Insurance
|
Equal Housing Lender.