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Don't be duped by a too-good-to-be-true offer
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| Secure savings,
insured by the FDIC
Here's an example of how one couple can have
upward of $1,000,000 fully insured by the FDIC at one bank.
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Surpassing the FDIC limit: | |
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| • | A
husband and wife, for example, can have $200,000 in a joint account and the full
amount will be insured. | | • | Each
can have $100,000 in individual accounts. | | • | Each
can have $250,000 in individual retirement accounts. | | • | Each
can set up $100,000 revocable trust accounts, payable on death, naming each other
as beneficiary. | | • | In
addition, they could set up as many revocable trusts as they want for qualified
beneficiaries -- parents, siblings, spouse, children and grandchildren. Each one
of those beneficiary accounts would be insured up to $100,000. | |
Another way to insure more than $100,000 is to buy bank CDs through a brokerage. Retail brokers who offer FDIC-insured CDs allow customers to select CDs from a list of banks offering specific maturities and yields. If you have more than $100,000, simply divide it among different banks. There's no paperwork to fill out; it's as simple as buying a stock.
The Certificate of Deposit Account Registry Service
or CDARS (pronounced "cedars") is another way to invest
more than $100,000 in CDs at one bank and have it all insured. But
instead of a brokerage handling the behind-the-scenes transactions,
a company called Promontory Interfinancial Network shuffles the
excess money around to other banks, buying the CDs you want. Some
1,500 institutions use the service; check to see if yours does.
Yes, FDIC-insured high-yield
CDs today pay in the neighborhood of 5.5 percent, although you
can find some slightly higher yields on introductory money market
offers. But the point is that there's no need to risk your money
on an investment with a noninsured company, especially one that
appears to pay scant attention to standard security measures.
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