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Update on FDIC Coverage



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With the recent rise in bank failures, we thought it would be worthwhile to revisit the rules for FDIC coverage of bank accounts. In response to the credit and banking crisis last fall, Congress authorized the Federal Deposit Insurance Corporation “FDIC” to temporarily increase the limit on deposit insurance to $250,000 per person from its former limit of $100,000. This temporary increase has now been extended until December 31, 2013. After that date the limit on most accounts will return to the former lower limit. (There is an exception for IRA accounts, which will remain at the increased level.)

This insurance coverage is designed to protect bank deposits in the event of bank failure. The FDIC guarantees the safety of deposits up to the amount of these limits. The limits are applied on an individual basis at each federally insured bank so an individual can obtain insured deposits at more than one bank.

At the current insurance levels, a husband and wife can actually obtain up to $1 million of coverage at a single bank by using multiple accounts registrations – one for him (up to $250,000), one for her (up to $250,000), and one joint account (up to $500,000).

If you have questions about your current coverage, be sure to confirm with your bank that you have properly registered the accounts to receive this level of combined insurance. In addition, you may use to confirm the insurance coverage you will be entitled to in the event of a particular bank failure.

We hope you find this information useful.

Horizon Wealth Advisors
Horizon Wealth Advisors is a Houston-based, privately owned, fee-only financial advisor established in 1999. Our mission is to develop long-term relationships with thoughtful, successful individuals, families, and organizations by supporting and assisting them in achieving their financial goals.

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