| Lately the stock market has been a very volatile ride. | | | | an IRA is insured to $250,000.00 in an insured bank. |
| This past year's performance has been poor and with | | | | An IRA with mutual funds as its primary investment |
| the rising fuel costs and credit crises these | | | | is not insured under FDIC. Up to now it has been |
| investment vehicles seem suspect. Certificate of | | | | pretty straightforward regarding coverage. |
| deposit (CD) rates are not the best they have been | | | | The problem develops when bank customers have |
| but there are still bargains available from banks trying | | | | more than $100,000.00 in deposits. There are ways |
| to build strong deposit reserves. Very conservative | | | | to increase the coverage of the FDIC insurance limits. |
| investors like CDs because most are insured with the | | | | One example is a husband and wife opens a joint |
| Federal Deposit Insurance Corporation (FDIC). FDIC | | | | account. Each depositor is covered for $100,000.00. |
| insurance allows account holders to get their money | | | | The total coverage on that account is $200,000.00. |
| back in case of the insured banks failure. However, | | | | Perhaps they add their three children to be |
| understanding how much and what is covered can | | | | beneficiaries of this money in case of death. The |
| difficult to understand. Talk with three different | | | | FDIC insurance coverage goes to $600,000.00. This is |
| bankers at three FDIC insured banks and you will get | | | | a great discussion to have with your financial |
| a variety of answers to questions regarding whether | | | | specialist at your insured bank. There are some |
| your money is fully insured or not. If you have less | | | | restrictions to who is covered as a POD (payable on |
| than $100,000.00 in an FDIC insured bank you are | | | | death), but it is a great strategy to increase |
| fully insured. That is if your account is some sort of | | | | insurance coverage. Account categories are very |
| demand deposit account (i.e. checking, money | | | | important to how FDIC coverage is placed. The first |
| market), savings account, or time deposit account | | | | is called the single account. This is where an |
| (CDs). The insurance covers the balance of these | | | | account(s) is held in one persons name or a fiduciary |
| accounts, principal and interest earned up to the day | | | | account for the benefit one person (i.e. minor savings |
| of the insured bank's closure. This is a very good | | | | account), sole proprietor business account(s) and |
| thing to have especially with the state of today's | | | | account(s) established as an estate. These accounts |
| economy and the challenging circumstances financial | | | | are insured to $100,000.00. The next category is |
| institutions are facing. | | | | retirement accounts such as traditional IRAs, Roth |
| As stated before "the basic insurance amount is | | | | IRAs, SEP IRAs and SIMPLE IRAs. Some self directed |
| $100,000.00 per depositor per insured bank." | | | | IRAs fall into this category as well. The coverage on |
| (FDIC-001-2007). Owners of specific IRA accounts | | | | Individual Retirement Accounts is $250,000.00. The |
| are insured up to $250,000.00. A CD for Ms. Bank | | | | revocable trust category has different FDIC limits |
| Customer is insured to $100,000.00, that same CD in | | | | depending on how the account is set up. |