FDIC INSURANCE COVERAGE
FOR TRANSACTION ACCOUNTS
In accordance with the Dodd- Frank Wall Street Reform and Consumer Protection Act, from December 31, 2010 to December 31, 2012, all funds in a “noninterest bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation. In addition, full FDIC protection is also provided for Interest on Lawyers Trust Accounts (IOLTA’s). This temporary unlimited coverage is in addition to and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules.
The term “noninterest bearing transaction account” includes a traditional checking account (or demand deposit account) on which the insured depository institution pays no interest. It does not include other accounts that may earn interest, such as a negotiable order of withdrawal (NOW) account, and money market deposit accounts, even if checks are drawn on the account.
The temporary full insurance coverage of “noninterest bearing transaction accounts” expires on December 31, 2012. After December 31, 2012, funds in noninterest bearing transaction accounts will be insured under the FDIC’s general deposit insurance rules, subject to the Standard Maximum Deposit Insurance amount of $250,000.
For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.
What does FDIC mean?
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation created by the Glass-Steagall Act of 1933. It provides deposit insurance which guarantees the safety of checking and savings deposits in member banks, currently up to $250,000 per depositor per bank.
Why is the FDIC important?
Any bank that is a member of the FDIC has to meet requirements set forth by the FDIC and other government regulatory agencies. The FDIC and these other agencies regularly examine these banks to make sure that they are performing to a higher standard than non FDIC insured banks.
Even with the higher standards, some banks still fail but if your FDIC member bank fails, the FDIC will guarantee that you do not lose any of your deposited funds. Your balance is insured to the limits set by the FDIC for your account.
What accounts does the FDIC insure?
The FDIC insures all checking, savings, money market and CD's, up to the insurance limit.
The FDIC does not insure investment accounts. That is money you invest in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities.
What are the FDIC insurance limits?
Currently the FDIC insurance limit is $250,000.00 per depositor. If every account you have at your FDIC insured bank totals $250,000.00 or less, YOU ARE COMPLETELY INSURED.
Are there exceptions to the limits or account types?
The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership.
You may qualify for more than $250,000* in coverage at one insured bank if you own deposit accounts in different ownership categories.