What You Need To Know About FDIC Insurance
What is the FDIC
The world financial crisis has dried up the credit market, caused money giants like Lehman Brothers to crash, and forced gigantic banks to combine, making many folks wonder where their money will be safe. Through the FDIC or the Federal Deposit Insurance Corporation the bank is still the best place to keep your money regardless of what occurs to your bank. In October 2008 the deposit insurance was briefly raised to $250,000 per depositor thru December 31, 2009, so if your area bank falls down you can still be guaranteed your deposit up to $250,000.
Get to Know the FDIC
Established in 1933, the FDIC was made to guarantee public confidence in the banking system. This worked by providing all depositors in FDIC-insured banks coverage up to $5,000 ( in the thirty's ), and second by taking over for a failed bank to gather and sell the bank's assets to settle the bank's debt including claims for deposits above the insured amount. The FDIC receives its funding from premiums paid by insured banks as well as revenues from its investments in US Treasury securities; no federal or state taxes are used.
Are you safe?
To maximize the protection the FDIC offers, there are a few things to keep in mind. First FDIC coverage does not extend to all financial institutions so ask your bank if they are covered or check the FDIC website to see if you bank is listed. Second coverage is for individual deposit accounts only up to $250,000 so no stocks, bonds, safety deposit boxes, mutual funds.
$250,000 - Beyond?
For coverage beyond the $250,000 there are a few specific instances such as establishing deposits under different ownership categories where excess coverage is allowed. Revocable Trust Accounts, or a deposit account opened by people with the stated intention of the account being turned over to one or more beneficiaries upon the death of the original account holder, can get over $250,000. For example if Mr. Smith has an deposit account worth $500,000, both his son and daughter would get $250,000 each if they were the beneficiaries named on the account. - 23167
The world financial crisis has dried up the credit market, caused money giants like Lehman Brothers to crash, and forced gigantic banks to combine, making many folks wonder where their money will be safe. Through the FDIC or the Federal Deposit Insurance Corporation the bank is still the best place to keep your money regardless of what occurs to your bank. In October 2008 the deposit insurance was briefly raised to $250,000 per depositor thru December 31, 2009, so if your area bank falls down you can still be guaranteed your deposit up to $250,000.
Get to Know the FDIC
Established in 1933, the FDIC was made to guarantee public confidence in the banking system. This worked by providing all depositors in FDIC-insured banks coverage up to $5,000 ( in the thirty's ), and second by taking over for a failed bank to gather and sell the bank's assets to settle the bank's debt including claims for deposits above the insured amount. The FDIC receives its funding from premiums paid by insured banks as well as revenues from its investments in US Treasury securities; no federal or state taxes are used.
Are you safe?
To maximize the protection the FDIC offers, there are a few things to keep in mind. First FDIC coverage does not extend to all financial institutions so ask your bank if they are covered or check the FDIC website to see if you bank is listed. Second coverage is for individual deposit accounts only up to $250,000 so no stocks, bonds, safety deposit boxes, mutual funds.
$250,000 - Beyond?
For coverage beyond the $250,000 there are a few specific instances such as establishing deposits under different ownership categories where excess coverage is allowed. Revocable Trust Accounts, or a deposit account opened by people with the stated intention of the account being turned over to one or more beneficiaries upon the death of the original account holder, can get over $250,000. For example if Mr. Smith has an deposit account worth $500,000, both his son and daughter would get $250,000 each if they were the beneficiaries named on the account. - 23167
About the Author:
Learn all regarding FDIC insurance at MindOnYourMoney.com - click to the financial site and read the complete story regarding FDIC insurance.
posted by X - Men @ 2:43 AM
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