Your FDIC Insured Deposits
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Betsy Summerville,
Senior Vice President,
Retail Banking |
Dear Salisbury Banker:
I always thought that my deposits at the bank were insured for up to $100,000 by the FDIC. At lunch recently, some of my co-workers said that the limit is now $250,000 - but one insisted the new limit expires at the end of 2009 and another was equally sure it had been extended. What is the final word?
PERPLEXED SAVER
DEAR PERPLEXED:
I can certainly understand your confusion. In fact, deposits are currently insured up to $250,000, and on May 20, 2009 President Obama signed legislation extending this increase through 2013. On January 1, 2014, the standard amount will return to $100,000 for most types of accounts. IRAs and certain other retirement accounts are permanently fixed at $250,000.
The current $250,000 limit covers all types of deposits at any insured bank, including checking and savings accounts; money market deposit accounts; and time deposits such as certificates of deposit.
This is where it gets a little complicated. Although the FDIC covers up to $250,000 per depositor, per institution, it is possible to keep more than $250,000 in one bank without losing coverage. This is because deposits maintained in different categories of legal ownership can be insured separately. For example, if you and your spouse each have a savings account, each is covered for $250,000. If you also have a joint account, it is also insured for $250,000 for each of you, for a total of $500,000. You could also each have $250,000 in retirement accounts and still be fully insured.
By the way, the $250,000 total for each category of legal ownership applies to any and all offices of the same institution, so you can't get extra insurance by spreading out your deposits in a similar account at different branches. However, deposits in one insured bank are insured separately from deposits in another insured bank.
I hope this helps clear up the confusion. FDIC insurance is a wonderful safeguard; since the agency was established in 1933, no depositor has ever lost a penny of FDIC-insured funds.
Betsy Summerville, Senior Vice President, Retail Banking
Do you have a banking question?
Please contact me at Banker@salisburybank.com.
This information is provided for informational purposes only and does not constitute tax or legal advice. Always refer to your tax advisor for guidance for your particular situation. Opinions expressed herein are subject to change without notice.Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed.