 Keeping
your accounts covered by the FDIC
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 Dear
Dr. Don,
How can I keep more than $100,000 in the same bank/credit union
and still be FDIC/NCUA insured?
Thank you,
-- Bev Banking
 Dear
Bev,
Recent legislation has changed an aspect of deposit insurance.
Retirement accounts are a separate class of insured
deposits, insured for up to $250,000, compared with the $100,000
limit on other classes of insured deposits.
Here's how the Federal Deposit Insurance Corp. presents
it on its Web site:
The new law provides up to $250,000 of deposit insurance
for retirement accounts -- the combined total of the traditional
and Roth IRAs (Individual Retirement Accounts), self-directed Keoghs
and certain other retirement accounts an individual may have on
deposit at an FDIC-insured bank or savings institution, up from
$100,000 previously. In general, self-directed means the consumer
chooses how and where the money is deposited.
Note: FDIC insurance coverage for self-directed
retirement accounts applies primarily to certificates
of deposits or "CDs," which are deposit accounts typically
held for anywhere from one month to five years. These accounts
also are insured to $250,000 separately from any other deposits
you may have at the same institution. The higher coverage took
effect on April 1, 2006.
The insurance limit on retirement accounts held at
a credit union as insured deposits (shares) also was raised to $250,000.
For the nonretirement accounts, if you or your family
has deposits at one insured bank or credit union totaling more than
$100,000, it's possible to have more than $100,000 in insured deposits,
because different ownership categories of accounts are separately
insured.
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From the FDIC Web site, the account classifications
are: |
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Insured deposits (shares) at credit unions follow
these same account-classification rules. If you're uncertain whether
the deposits in your accounts are insured, you should talk to your
banker, use EDIE,
the electronic deposit insurance estimator on the FDIC Web site,
or the share insurance estimator on the NCUA
Web site.
The Bankrate article, "CDARS:
An easy way to beat $100,000 FDIC limit,"describes how a CDARS
account allows you to deposit up to $50 million through one financial
institution and have the entire deposit FDIC-insured.
To ask a question of Dr. Don, go to the "Ask
the Experts" page, and select one of these topics: "financing
a home," "saving & investing" or "money."
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