What Do the FDIC Insurance Limits Cover?

You’ve probably heard that Congress increased the limit of FDIC insurance from $100,000 to $250,000 back in the second half of 2008, when it seemed the sky would fall any day. But did you know that increased coverage expires on 1/1/2010? I didn’t either.

I saw a sign in my local bank stating the increase in coverage and that it will reset to $100,000 on midnight of 12/31/2009 unless Congress extends it.

So what does the FDIC insurance cover?

• Deposits in checking and savings accounts
• Money market deposit accounts
• Certificates of Deposit (CDs).

The coverage is per institution – not account. In other words, only $250,000 of your total account deposits are covered at each bank. If you have more than $250,000 in assets to deposit, do so at various institutions to split up your insurance coverage.

What’s NOT covered by FDIC insurance?

• money invested in stocks
• money invested in bonds
• money invested in mutual funds
• life insurance policies
• annuities
• municipal securities

These are backed by “the full faith and credit of the United States government”, but not FDIC insurance:

• U.S. Treasury bills
• bonds
• notes

Other important points to note:

Deposits in separate branches of an insured bank are not separately insured.

It is possible to have more than $250,000 in deposits and still be covered under certain circumstances (see your bank representative).

For more info check out the FDIC website.

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