Federal Deposit Insurance Corporation
On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.
All funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC's general deposit insurance rules.
The term “noninterest-bearing transaction account” includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes Interest on Lawyers Trust Accounts (“IOLTAs”). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts. For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.
FDIC Your New, Higher FDIC Insurance Coverage
With banks and the economy in the news so much lately, many people are thinking more about the safety of their money. The FDIC has some good news – your FDIC deposit insurance coverage has significantly increased. "Clearly, the good news for consumers, small businesses and other depositors is the increased likelihood that they can have more of their deposits – or possibly all of their deposits – fully insured at their bank," said Kathleen Nagle, FDIC Associate Director for Consumer Protection.
Here is an overview of what you need to know about your new FDIC insurance coverage.
The basic limit on federal deposit insurance coverage has been permanently increased from at least $100,000 to at least $250,000 per depositor. That's the result of a new law passed by Congress in July 2010. It means that if you (or your family) have $250,000 or less in all of your deposit accounts at the same insured bank, you don't need to worry about your insurance coverage – your deposits are fully insured.
As always, you may qualify for more than the basic insurance coverage at one insured bank. That’s because the FDIC provides separate insurance coverage for deposits held in different "ownership categories." For example, under current rules, your deposits in:
- Single accounts (in one name only) are insured up to $250,000;
- Joint accounts (for two or more people) are protected up to $250,000 per owner;
- Certain retirement accounts including IRAs, are covered up to $250,000; and
- Revocable trust accounts (deposits intended to pass along to named beneficiaries when the account owner dies) can be protected up to $250,000 for each named beneficiary subject to specific limitations and requirements.
To help consumers, bankers and others understand how the new law affects deposit insurance coverage and to help consumers verify whether their deposit accounts are fully protected, the FDIC provides the following resources:
- Information on deposit insurance on the FDIC Web site: Updated brochures on deposit insurance coverage (including the basic guide, Deposit Insurance Summary, and the more comprehensive guide, Your Insured Deposits) and a new version of the "Electronic Deposit Insurance Estimator" (EDIE), an interactive service that allows consumers to quickly and easily check whether their accounts are fully protected, are now available on the FDIC's Web site (www.fdic.gov). Also, try www.FDIC.gov/EDIE -- the FDIC’s online deposit insurance estimator.
- A toll-free consumer assistance line: Help and information about deposit insurance and other matters of interest to bank customers are available at 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday from 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, the number is 1-800-925-4618.