What protection do you have for your money?

November 07, 2008|By LYNN LITTLE

The uncertainty in the financial markets has created questions as to what would happen to your accounts if your bank and/or credit union were to fail.

Bank accounts

If an insured bank or savings association fails, the Federal Deposit Insurance Corporation protects deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs) against any loss up to the federal limits.

The basic insurance coverage has been $100,000 per depositor per insured institution, but you may qualify for more than $100,000 in coverage at one insured bank if you own deposit accounts in different "ownership categories." Congress has temporarily increased FDIC deposit insurance from $100,000 to $250,000 per depositor through Dec. 31, 2009.

The FDIC provides separate coverage for deposits held in different account ownership categories. The coverage limits shown in the chart below refer to the total of all deposits that an account holder has in the same ownership categories at each FDIC-insured bank. The chart shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met.


Basic FDIC deposit insurance coverage limits

o Single accounts (owned by one person) - $250,000 per owner

o Joint accounts (two or more persons) - $250,000 per co-owner

o IRAs and certain other retirement accounts - $250,000 per owner

o Trust accounts - $250,000 per owner per beneficiary

o Corporation, partnership and unincorporated association account - $250,000 per corporation, partnership or unincorprated association

o Employee benefit plan accounts - $250,000 for the non-contingent, ascertainable interest of each participant

o Government accounts - $250,000 per official custodian

o Non-interest bearing transaction accounts - Unlimited coverage (only at participating FDIC-insured banks and savings associations)

On Jan. 1, 2010, the standard coverage limit will return to $100,000 for all deposit categories except IRAs and certain retirement accounts, which will continue to be insured up to $250,000 per owner.

If you have questions about your insurance coverage, visit, which features an electronic deposit insurance estimator (EDIE), an interactive Web site that can be used to calculate your deposit insurance coverage. You can also call FDIC deposit insurance specialists toll-free at 877-ASK-FDIC (877-275-3342).

Credit union accounts

The National Credit Union Share Insurance Fund (NCUSIF) protects credit union members against losses if a federally insured credit union should fail.

These accounts include regular shares, share drafts (similar to checking), money market accounts and share certificates.

Beginning Oct. 3, the basic limit on federal share insurance coverage has been temporarily increased from $100,000 to $250,000 per member. The legislation provides that the basic share insurance limit, or standard maximum share insurance amount, for most types of accounts will return to $100,000 after Dec. 31, 2009.

New basic NCUA share insurance limits for common ownership types

o Individual accounts (owned by one person) - $250,000 per member

o Joint accounts (two or more persons) - $250,000 per co-owner

o Revocable trust (ITF/POD) accounts - $250,000 per member per beneficiary subject to specific limitations and requirements

o Corporation/partnership/organization accounts - $250,000

IRAs and certain other retirement accounts will continue to be insured up to $250,000 after Dec. 31, 2009, in accordance with the Deposit Insurance Reform Act of 2005.

Retirement account insurance protection is separate and apart from insurance coverage on other credit union accounts. Separate coverage is also provided for both revocable and irrevocable trusts.

NCUA has a share insurance estimator to help members better understand the protection offered. This interactive Web site allows users to input data to compute the amount of coverage available under different account structure scenarios. This resource is available at

To ensure your funds are fully protected, you should understand the coverage limits of accounts you have in your bank and/or credit union. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC was established, no depositor has ever lost a single penny of FDIC-insured funds.

Lynn Little is a family and consumer sciences educator with University of Maryland Cooperative Extension in Washington County.

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