Each depositor insured to at least $250,000 per insured bank

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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.

Winter 2004/2005

The FDIC Always Pays 100 Percent of Insured Deposits if a Bank Fails

Q: My investment advisor told me that if my bank fails, the FDIC could take up to 99 years to pay my insured deposit accounts. He also told me that the FDIC only covers principal, not interest, and only pays 17 cents for each dollar in an account. Is this correct?

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A: No, the information you received from your financial planner is definitely NOT correct. In the unlikely event that a bank were to fail, federal law requires the FDIC to pay 100 percent of the insured deposits — including principal and interest — "as soon as possible" after an insured bank fails. Historically, the FDIC pays insured deposits within a few days after a bank closes, usually the next business day. In most cases, the FDIC will provide each depositor with a new account at another insured bank. Or, if arrangements cannot be made with another institution, the FDIC will issue a check to each depositor.

Also, while the basic insurance limit is $100,000 per depositor per insured bank, this coverage is applied separately to funds held in different ownership categories. If, for example, you have some funds in single accounts, some in joint accounts, and other money in other categories of accounts, you can have well above $100,000 at the same bank and still be fully insured by the FDIC.

Got questions about deposit insurance or other consumer protections? Get answers by going to the FDIC's Web site at www.fdic.gov or contacting the FDIC at the phone numbers or addresses listed on the For More Information page.

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Last Updated 02/14/2005 communications@fdic.gov