The Federal Deposit Insurance Corporation (FDIC) raised the limit of deposit insurance on U.S. bank accounts on October 3rd from $100,000 to $250,000 per depositor. The FDIC limit increases are a temporary measure to help restore consumer confidence in banks after several major institutions, including Washington Mutual and Wachovia, failed earlier this fall. The increased FDIC limits will remain in effect until December 31, 2009, after which the limit will return to $100,000.
Which Accounts Are FDIC Insured?
Many U.S. bank accounts, including the majority of checking and savings accounts, are FDIC insured. In the event an FDIC-insured bank in which you hold a deposit fails, the U.S. Government will repay your deposits up to the FDIC limits. Most member banks will prominently display the FDIC logo in their marketing materials, on their Web sites, and in their branches.
How do FDIC Insurance Limits Work?
The FDIC insures deposit accounts at participating banks for up to $250,000 per depositor. That means that if you have a checking and savings account in your name at the same bank, you are insured for up to $250,000 in both accounts (not up to $250,000 per account).
Joint accounts are covered for up to $250,000 per co-owner, meaning that each joint account is effectively covered for up to $500,000. Additionally, joint account holders with both a joint and single bank accounts can be FDIC insured for up to $1,000,000 ($250,000 each in a joint account and $250,000 in two single accounts).
What is the FDIC?
The Federal Deposit Insurance Corporation is a government agency created by congress in 1933 to build public confidence in the banking system during the Great Depression. The FDIC provides deposit insurance to account holders at more than 8,400 American banks and savings associations. The insurance entity is funded entirely by contributions from its member banks—there is no cost to taxpayers.