MONEY MARKET ACCOUNTS AND FDIC INSURANCE
If there is one good thing that has come out of all this financial scandal and turmoil it is the raising of the guaranteed FDIC insurance rates. Every individual money market account or any other financial account at a bank or brokerage used to be insured up to $100,000 which is really not a whole lot these days. This $100,000 limit on insurance made it very difficult for those people with money to invest it in CD’s and money market accounts safely. So much for looking for the heighest money market interest rates, they just wanted to find safe places to put their money and often had to spread it out between many banks.
Since the banking and mortgage crisis began, this $100,000 FDIC insurance limit has been raised to $250,000 as it should have been done years ago. This new FDIC higher limit is now guaranteed through 2013 and you can read about it here – FDIC extends $250,000 through 2013. This means that any individual is insured up to $250,000 per institution. If you have one million dollars you wanted to safely put away, you would then have to have accounts at four different banks. This all assumes, of course, the United States government is going to have the money to pay you. The way things are going now, that $250,000 might be worth a loaf of bread when it comes time to collect.
One note about the FDIC insurance. You don’t have to pay anything or sign anything to get it. It is automatically there by law and any account holder will have it by default.
| Single Accounts (owned by one person) | $250,000 per owner |
| Joint Accounts (two or more persons) | $250,000 per co-owner |
| IRAs and certain other retirement accounts | $250,000 per owner |
| Trust Accounts | $250,000 per owner per beneficiary subject to specific limitations and requirements |
| Corporation, Partnership and Unincorporated Association Accounts | $250,000 per corporation, partnership or unincorporated association |
| Employee Benefit Plan Accounts | $250,000 for the non-contingent, ascertainable interest of each participant |
| Government Accounts | $250,000 per official custodian |
| Non-interest Bearing Transaction Accounts | Unlimited coverage – only at participating FDIC-insured banks and savings associations ** |
