Think You Know FDIC?
One of the great things about writing this blog is that I’m constantly learning new things about personal finance. That’s why I started writing it. I wanted to continue learning and share what I’ve learned about personal finance with others. So it’s always interesting when I learn something about a topic I knew all about, like FDIC insurance.
FDIC stands for Federal Deposit Insurance Corporation. It’s a government agency that insures money that’s deposited by people into banks, S&Ls, and the like. The credit union equivalent, by the way, is the National Credit Union Administration (NCUA), which is basically a mirror of the FDIC.
It’s pretty common knowledge that the FDIC insurers $100,000 in deposits. But here are a couple of additional facts you may not know.
- The $100,000 limit is based on account ownership. In other words, if you and your spouse have a joint savings account, the insurance on that account is $200,000.
- The $100,000 maximum is per owner per institution. So if you have more than $100,000 to deposit as an individual, you have to open accounts at different institutions. Different accounts at the same bank won’t do it.
- IRAs are covered up to $250,000. As of 2006, IRAs have a different and separate maximum. That’s in addition to any other deposits at that institution. So you could actually have $350,000 in insurance as an individual at one bank.
Just a couple of quick clarifications and facts about FDIC insurance.
Here are a couple of posts from others about FDIC:
FDIC and NCUA Deposit Insurance at Blueprint for Financial Prosperity
FDIC Insurance Higher on Retirement Accounts at Five Cent Nickel
October 4th, 2007 at 1:04 pm
FDIC coverage didn’t hit home for me until NetBank collapsed recently and I realized that I was a customer - I had a small sum remaining in my account from taking advantage of a promotion NetBank was running. The amount was fully FDIC insured.