7 Things Seniors (and Everyone Else) Should Know About FDIC Insurance

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Americans put their money ... and their trust ... in FDIC insured bank accounts because they want peace of mind about the savings they have worked very hard for years to collect. Here are some things that senior citizens should know and remember about FDIC insurance.
FDIC Insurance

1. The basic insurance limit is $ 100,000 per depositor per insured bank. If you or your family have $ 100,000 or less in all deposit accounts at the same insured bank, you do not need to worry about your insurance. Your funds are fully insured. Your deposits in banks separately chartered separately insured, even if the bank is affiliated, such as belonging to the same parent company.

2. You may qualify for more than $ 100,000 in coverage at one insured bank if you have deposit accounts in different ownership categories. There are several categories of different ownership, but the most common for consumers is the ownership of the account (for the owners), joint ownership accounts (for two people or more), retirement account self (individual retirement accounts and Keogh accounts you choose how and where money saved) and canceled Trust (deposit accounts said the funds will be passed to one or more Recipients named when the owner dies). Deposits in different ownership categories separately insured. That means one person can have much more than $ 100,000 FDIC insurance at the same bank if the funds in a separate category of ownership.

3. Death or divorce in the family can reduce the FDIC insurance. Let's say two people have accounts and one died. FDIC rules allow a grace period of six months after the death of the victim or perpetrator depositor gives real opportunity to restructure the accounts. But if you fail to act within six months, you run the risk of accounts that exceed the $ 100,000 limit.

Example: A husband and wife have a joint account with the "right to defend," the general provisions in the joint account to determine that if a person dies the other will have all the money. Account total $ 150,000, which is fully insured because there are two owners (giving them up to 200,000 coverage). But if one of the owners along with two dead and spouses do not change the account within six months, deposit $ 150,000 will automatically be insured for only $ 100,000 as spouses single-ownership account, along with other accounts in the bank category. Results: $ 50,000 or more will be on the limit of insurance and risk of loss if the bank fails.

Also realize that death or divorce Receiver on certain trust accounts can reduce the insurance immediately. There is no grace period of six months in the situation.

4. No depositor has lost a penny of FDIC insured funds as a result of the failure. FDIC insurance only comes into play when the bank FDIC insured institutions failed. And fortunately, a bank failure is rare nowadays. This is largely due to all FDIC insured banks must meet high standards for financial strength and stability. But if your bank fails, FDIC insurance will cover the deposit account, dollar for dollar, including the head and accrued interest, up to the insurance limit. If your bank fails and you have deposits above the federal insurance limit of $ 100,000, you may be able to recover some or, in rare cases, all of your funds are insured. However, the majority of depositors in failed institutions is within the insurance limit of $ 100,000.

5. FDIC deposit insurance guarantee is rock solid. In mid-2005, the FDIC has $ 48 billion reserve to protect depositors. Some people say they have been told (usually by marketer’s investments that compete with bank deposits) that the FDIC does not have the resources to cover the insured depositors funds if the amount is unprecedented Bank failed. It is false information.

6. The FDIC pays depositors immediately after the failure of an insured bank. Most insurance payments made within a few days, usually the next business day after the bank was closed. Do not believe the misinformation spread by some investment sellers who claim that the FDIC took years to pay insured depositors.

7. You are responsible for knowing your insurance deposit.

Knowing the rules, protect your money.