Thu, September 09, 2010
FDIC Insurance Limits Permanently Raised to $250K
With all the hoopla over the consumer protections in the July financial reform bill, a permanent increase in the FDIC deposit insurance limit went into effect with relatively little notice.
During the 2008 financial crisis, the FDIC deposit insurance limit was increase to $250,000. The increase was originally intended to be temporary, but was extended in 2009 through the end of 2013. The Dodd-Frank Wall Street Reform and Consumer Protection Act made the increase in the FDIC’s coverage of bank deposits permanent.
Many people aren’t aware that FDIC provisons actually allow one depositor to have more than $250,000 in funds insured at a single bank under the right circumstances. Through the use of joint accounts, bank IRAs and other types of accounts, a couple could easily have insurance coverage well in excess of $1MM. For example, a husband and wife could each have individually-owned IRAs and revocable trusts plus CDs containing $250,000 each, as well as a joint account of $500,000. The seven accounts could be held at a single bank and the couple would have a total of $2MM in FDIC insurance coverage.
Want to know how much FDIC coverage you’re entitled to? The FDIC provides a useful online calculator that allows consumers to determine the amount of FDIC insurance coverage available in different situations.