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New FDIC Deposit Insurance Coverage Limits

This article was written by in Banking. 16 comments.


With the $700+ billion bailout bill signed into law, the FDIC now insures more deposits per account holder per bank. Here are the new limits for the most common account types, effective October 3.

  • Single accounts are insured up to $250,000 per owner through December 31, 2009
  • Joint accounts are insured up to $250,000 per co-owner through December 31, 2009
  • IRAs and other retirement accounts are insured up to $250,000 per owner
  • Trust accounts are insured up to $250,000 per owner per benficiary

Single and joint accounts will revert to the $100,000 maximum after December 31, 2009 unless a new law is created before then to extend the increased limits.

These increases don’t have much of an effect on everyday depositers like me. It’s unlikely that individuals keep more than $100,000 in a single bank account. These increased limits do help small businesses that need to keep cash on hand to fund payroll accounts and other operating accounts.

Small banks are also boosted by this new law because other businesses may willing to increase deposit balances. More capital available to these small banks can in turn make more cash available for local lending.

The increase may, according to Congress, create more confidence in the safety of the banking system, preventing a massive wave of withdrawals. When people lose confidence in banks, they withdraw their money to keep cash on hand, and the banking industry and the government want to prevent that as much as possible.

Published or updated October 6, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar CJ

Is this effective immediately? I may soon have $150,000 to put into a bank account while I look for a new house. I just want to make sure it’s safe.

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avatar Luke Landes ♦127,373 (Platinum)

The new limits are effective October 3. (I added that information to the post.)

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avatar Dan

Alright, I’m off in the old time machine to October 2007, when my equity investments were still worth about $250K!

I’ll cash it all out and return to this miserable October and put it all in a nice, safe, FDIC insured account!

Woohoo! :)

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avatar rob

In a day where so many people have more money than they know what to do with, regardless of a bad economy, these new FDIC limits should be made permanent. As time passes, so many things don’t get indexed. Just like many people are rooting for the AMT (Tax) to be increased because its hitting more people every year, the FDIC should do the same. They have been collecting premiums for many, many years and have never had much to with that money except profit. So IMO they should start offere us more protection as we go forward.

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avatar William

How are banks structuring business accounts that have traditionally used over-night repos, but still need the liquidity at certain times of the year to pay certain large expenses. Also, are these repos potentially lost if a bank fails. Also, I have read that if you keep your money in non-interest bearing checking account then the entire amount is covered by the FDIC. Is that correct?

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avatar Frank

I think its good that the rates went up but how about for those businesses that have more that 250k in their accounts. How do they benefit from this?

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