What Do the FDIC Insurance Limits Cover?
Posted on | January 14, 2009 |
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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