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Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

Summer 2009

New Brochure, Video on FDIC Deposit Insurance
Although the basic coverage limit is currently $250,000 at one bank, you can have much more protection

As previously reported in FDIC Consumer News, some of the rules governing deposit insurance have changed significantly since the Fall of 2008. Most notably, Congress has increased the basic insurance limit — from up to $100,000 to up to $250,000, through December 31, 2013. Now, to help you better understand your current protections, including how you can have far more than $250,000 of insurance coverage at the same bank, the FDIC has produced two new resources and is updating others.

One new resource is a brochure called "Deposit Insurance Summary." It's an overview of the basic information that most people want to know about their FDIC coverage. This brochure is available in English, Spanish, Korean, Chinese (traditional and simplified) and Vietnamese. It replaces the brochure entitled "Insuring Your Deposits."

The other new resource is a 30-minute video to help bank customers and employees understand the basics of the current deposit insurance rules. It is available in English and Spanish.

You can see and order the new brochure and video at www.fdic.gov/deposit/deposits (the FDIC's deposit insurance Web site). Or, you can order a free copy by calling the FDIC toll-free at 1-877-ASK-FDIC, which is 1-877-275-3342.

A more comprehensive guide to the insurance rules, the FDIC's "Your Insured Deposits" brochure, is being updated and will be available soon. Please note that any printed material related to FDIC insurance coverage dated before May 20, 2009, does not reflect the current rules and should be discarded.

Also remember that the FDIC has many resources on deposit insurance, including experts you can call at that same toll-free number. "The FDIC Call Center provides a great service for consumers," said James Deveney, Chief of the FDIC's Deposit Insurance Outreach Section. "We encourage anyone with a question about their FDIC insurance coverage to call us."

Then there's "EDIE," the FDIC's interactive deposit insurance calculator at www.fdic.gov/edie. "By entering information into this easy-to-use, online tool, consumers can get confirmation of their deposit insurance coverage 24 hours a day, seven days a week, anywhere they have Internet access," said Kate Spears, an FDIC Senior Consumer Affairs Specialist.

Finally, we leave you with this brief reminder of how you can have more than $250,000 in a bank and all of it can be protected.

As always, you may qualify for more than the basic insurance coverage at one bank if the funds are held in different "ownership categories." For example, if your deposits at a bank are in two different ownership categories — a "single" account (in your name alone) and an IRA (Individual Retirement Account) — your funds are separately insured for up to $250,000 in each category. That would mean FDIC insurance coverage of up to $500,000...just for you and not including the additional coverage for any deposits your family members have at the same bank.

Joint accounts are another way to maximize your deposit insurance coverage. These are deposit accounts owned by two or more people. Let's suppose that you and your spouse have a joint account at the same bank and that you both have equal rights to withdraw the money. The joint account would be insured by the FDIC for up to $500,000 in total — $250,000 for you and $250,000 for your spouse. And it would be insured separately from the deposits you have in other ownership categories at that same bank, such as a single account and an IRA.

"Revocable" trust accounts are yet another way to maximize deposit insurance coverage. These are deposit accounts that are intended to pass to the named beneficiaries upon the owner's death. They are called revocable because, after setting up the account, the owner can change the beneficiaries and the dollar amounts to be received upon the owner's death.

In their simplest form, revocable trust accounts are designated as "payable on death" or "in trust for" accounts. Another type of revocable trust account is a "living" or "family" trust account. These are deposits held in connection with a formal, legal document usually drafted by an attorney for estate-planning purposes.

In general, under a September 2008 FDIC rule change, a revocable trust account owner can name almost anyone or any IRS-qualifying charity or nonprofit organization as a beneficiary and the owner will receive up to $250,000 in coverage for each beneficiary — that means $250,000 if there is one beneficiary, $500,000 if there are two, and so on. "The ability to maximize deposit insurance coverage while also conducting estate planning is the reason revocable trust deposits have become so popular," said Martin Becker, a Senior Consumer Affairs Specialist at the FDIC.

Full Guarantee Program Extended Through Mid-2010

In October 2008, the FDIC announced that deposits in noninterest-bearing transaction accounts and NOW accounts earning 0.5 percent or less would temporarily be fully guaranteed by the FDIC at participating institutions through year-end 2009. The latest is that on August 26, 2009, the FDIC extended the temporary program six months, though June 30, 2010.

While the program is primarily used by businesses with large balances in their checking accounts, any depositor can qualify. For details, visit www.fdic.gov/deposit/deposits/changes.html or call the FDIC toll-free at 1-877-ASK-FDIC (1-877-275-3342).

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Last Updated 8/26/2009