dcsimg
 
Advertiser Disclosure: Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.

Ask the Expert: FDIC Insurance Limits

July 15, 2010

By Richard Barrington | MoneyRates.com Senior Financial Analyst, CFA

Q: I know the FDIC recently changed the limit on deposit insurance. My wife and I have $225,000 in a money market account, and $300,000 in various CDs. Does the change affect us, and should we worry about the limits changing again?

A: The deposit insurance limit has been raised from $100,000 to $250,000. As this is written, that higher limit is only temporary, but a provision of the banking reform bill now pending would make it permanent. That bill may have passed by the time you read this, so check out the FDIC web site at www.fdic.com to find out the latest on deposit insurance.

Assuming the $250,000 insurance level, since that will be in place for the next few years at least, it sounds like you and your wife would be affected, in a couple of ways. The good news is that your $225,000 money market account should now be fully covered. The rule applies per depositor per bank, so even if this account were in one or the other of your names, you'd fall under the $250,000 ceiling. If the account is in both your names, the ceiling is effectively doubled.

However, if you have another $300,000 in CDs at the same bank, that would exceed the combined limit of $500,000. Consider taking this opportunity to shop for CD rates and start moving that money to another bank as your CDs roll over. Between the two of you, that $300,000 can readily fit under the FDIC insurance limit if it is at a different bank than your money market account.

One wrinkle on the above -- if any of the money is in an IRA, that is considered a separate depositor than you and your wife as individuals, and so could entitle you to more insurance coverage.

Got a financial question about saving, investing or banking? MoneyRates.com invites you to submit your question to our "Ask the Expert" feature. Just go to our home page and look for the "Ask the Expert" box on the bottom-left.

Your responses to ‘Ask the Expert: FDIC Insurance Limits’

Showing 2 comments | Add your comment
don Theriault

6 March 2012 at 3:16 pm

I am a President of a Corporation is the 250k limit the same for Business accounts?

Carl

16 January 2012 at 1:22 pm

I'm about to sell my private business and will have several million to bank.I'm concerned that FDIC only insures up to $250k (yes the bill passed - it's permanent). Does it make sense to deposit in multiple banks, or is there a better approach?

Add your comment
(required)
(will not be published, required)