New FDIC Insurance Limits
October 7th, 2008
With a stroke of a pen, President Bush signed the Bail-out plan on Friday evening (10/3/08). A provision that was included was temporarily increasing the FDIC Insurance limit to $250,000. The increased limit is only in effect until 12/31/09. Congress would have to pass more legislation to make it permanent. The NCUA will follow suit so that federally insured credit unions will have the same coverage as the FDIC.
What this means for you: Any liquid accounts such as a checking, savings, or money market account at an FDIC insured bank or NCUA insured credit union are covered up to $250,000 until 12/31/09. Any CDs you have are also covered. You need to be careful with CDs though. If you invest in a new CD and it matures before or on 12/31/09, you will be covered up to $250,000 (assuming you have no other deposits). If it matures after 12/31/09, whatever amount is above $100,000 has the potential to be uninsured.
Personally I wouldn’t gamble that Congress will make the change permanent. I would only do CDs at the new maximum that mature before 12/31/09.
I will make a follow-up post regarding joint accounts and revocable trust accounts. It isn’t clear if the new limits apply to those or not. cd :O)
-- By Chris Duncan
I agree 100% its exactly what I’m doing, staying with 7 Month CD’s
Only way I’d go past the expiration date is to stay under 100K if the interest rate offered was pretty high.
On the other hand, I’m also looking at this mess and starting to wonder myself if its better to just start taking money out the bank and keep it home.
With the residential housing problems still going strong, and now the commercial property getting started, which wasn’t hard to figure since who was gona be around to pay that bill if people were out of work and not making any money to buy stuff at the malls, Its looking more and more like even the FDIC might not be able to cover all debts. Or if they do you could have your money stuck in limbo so long you might be dead before you can get to it.
So I’m not too sure now what the answer is.
Is there a possibility that you could send me a link to your latest blog, or one to the follow up blog in which you said that you would follow up on regarding joint accounts and revocable trust accounts?
Thanks a bunch! 🙂
Mike — Here is a link to an article I wrote on Knol. Although, I still need to update the figures. Basically, all account types are now insured up to $250,000. A husband and wife on their own could have $1MM insured at one bank. Adding PODs or beneficiaries in a trust can increase that amount substantially.
FDIC and NCUA Insurance