FDIC Insurance: Deposits up to $250,000 Covered until 2014 – 2015 Update

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fdic-insurance-deposits-up-to-250000-covered-until-2014Federal Deposit Insurance Corporation (FDIC): Depositor insurance protection for up to $250,000 per depositor was set to expire at the end of this year and revert back to only $100,000 in FDIC insurance protection per depositor.This past week that coverage was extended until the end of 2013. They should have made the change permanent, why stop at 2013?

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Update: The $250,000 was permanently raised when the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010. The current standard maximum deposit insurance amount is $250,000.

On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor. The new law also gave the FDIC the authority to borrow money from the U.S. Treasury if needed. The FDIC's reserve fund to cover deposit accounts has shrunk because of the failure of so many banks this past year.

You are not limited to only $250,000 in FDIC coverage at a particular bank. You have coverage based on they type of account. Here are the limits.

  • Single Accounts (owned by one person) $250,000 per owner

  • Joint Accounts (two or more persons) $250,000 per co-owner

  • Certain Retirement Accounts $250,000 per owner

Another FDIC program, the Transaction Account Guarantee Program, provides depositors with unlimited coverage for non-interest bearing transaction accounts if their bank is a participant in the FDIC’s Temporary Liquidity Guarantee Program.
Non-interest bearing checking accounts include Demand Deposit Accounts (DDAs) and any transaction account that has unlimited withdrawals and that cannot earn interest. Also included are low-interest NOW accounts that cannot earn more than 0.5% interest. Interest-bearing accounts include NOW accounts that can earn more than 0.5% interest, other interest-bearing checking accounts, Money Market Deposit Accounts, savings accounts, and Certificates of Deposit (CDs). This program is scheduled to end on December 31, 2009.
Author: Brian McKay
May 24th, 2009