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How Safe Is Your Money?
– December 1, 2008
With all of the talk about the state of the economy, one question comes to mind: how safe is your money? On October 3, 2008, President Bush signed the Emergency Economic Stabilization Act of 2008, immediately increasing the Federal Deposit Insurance Corporation’s (FDIC) insurance on all deposit accounts at insured banks from $100,000 to $250,000 per depositor. If you meet the guidelines specifically outlined by the FDIC, the insurance will protect you against the loss of your funds if your insured bank fails.
How do I qualify?
To qualify, your deposit accounts must be held at an FDIC insured bank and coverage is limited to $250,000. Insured deposit accounts include checking, savings, and money market accounts, along with certificates of deposit. Money invested in stocks, bonds, mutual funds, and annuities are not covered, even if they are purchased through an FDIC insured bank. It is important to note that the $250,000 coverage limit generally applies to the total of all deposits held for a particular depositor at a specific bank rather than to each individual account held for that depositor.
Is it possible to increase my coverage?
Yes, it is possible to increase your FDIC insurance coverage. The $250,000 insurance limit is applied on a per bank basis. Thus, if you have deposit accounts spread across multiple insured banks, each insured bank is subject to the $250,000 limit separately. If a particular insured bank has multiple branches, those branches, along with the main office, are considered to be one insured bank.
In some cases, it is also possible to increase your coverage beyond the $250,000 limit at a particular insured bank. You can increase your FDIC deposit insurance coverage if you have accounts held in different categories of ownership. For example, certain retirement accounts are insured separately from single or joint accounts. For more information on ownership categories and their related coverage, visit the Ownership Categories section of the FDIC website.
While the $250,000 FDIC insurance coverage is set to revert back to $100,000 on January 1, 2010, the additional protection provides reassurance for the safety of our deposits.
For more information, see the FDIC info Q&A or visit the FDIC website at http://www.fdic.gov/.
Josh Parsons
318-429-2059
jparsons@hmvcpa.com
Josh is a member of the audit department at our Shreveport location. He graduated from Louisiana State University in Shreveport with an Accounting and Financial Analysis double major and Mathematics minor.