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Ask Dr. Don

FDIC insurance limits

Dear Dr. Don,
Can an individual have $100,000 in a single name, $100,000 in a joint account and $100,000 in an IRA account in the same bank and be insured for $300,000?
Thank you,
Bob Bank

Dear Bob,
The FDIC insurance limits for a single depositor at one financial institution is $100,000, but by having individual, joint and retirement accounts you can effectively increase the amount of insured deposits at a single institution.

Rules put in place in April of 1999 allow the insurance limit on a joint account to increase to $100,000 per joint account owner. A joint account with your spouse could be insured for up to $200,000 with each of you having $100,000 insurance. This is over and above the $100,000 in insurance you can have in an individual (single ownership) account. Using testamentary (payable on death) accounts and other types of trusts and retirement accounts can increase the amount of insured deposits at a single financial institution even further.

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The Federal Deposit Insurance Corporation (FDIC) has a calculator called EDIE on its Web site that will question you about your accounts and provide information on the level of insured deposits at any one financial institution.

Discuss your situation with a representative of your bank if you're uncertain whether a deposit is insured. When in doubt, divide and conquer by depositing money at another FDIC insured financial institution -- not a different branch of the same financial institution. Stay aware of mergers since whenever two or more insured depository institutions merge, customer's deposits continue to be separately insured for only six months from the date of the merger.

See this Bankrate feature for more on FDIC insurance limits.

-- Posted: May 15, 2003

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FDIC insurance limits
Financial advice glossary
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