Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
Update: The higher FDIC limits have been extended through 2013.
Earlier this fall, FDIC insurance limits increased from $100k to $250k. But guess what? That increased FDIC coverage is set to expire on 12/31/2009. Thus, assuming that these changes aren’t extended or made permanent, the coverage limits will fall back to their original values in just over a year. With that in mind, a reader named Dale recently asked the following question:
If I get a five year certificate of deposit (CD) for more than $100k (but less than $250k), will this CD be covered in full for the full five years by the FDIC? Or will the extended coverage expire in Dec 2009?
That’s a great question. Unfortunately for Dale, his CDs will only be protected by the higher limits until the end of December 2009. At the point, the coverage will fall back to $100k. According to an FDIC press release:
“…all the deposits a consumer has at a bank in his or her name alone will be fully insured up to $250,000 through December 31, 2009. After that date, the depositor will only be insured up to $100,000, with any balance over that limit becoming uninsured.”
Expanding your FDIC limits
The good news is that you can actually stretch your limits beyond the basic coverage amounts by employing additional ownership categories. Because coverage is determined on a “per depositor” basis, jointly held accounts qualify for twice the coverage. On top of that, accounts held in different ownership categories are separately insured.
In light of the above, it’s actually possible for a married couple to protect up to $1M at a single bank — i.e., they can individually hold $250k apiece plus a join account of $500k. Even after the coverage limits revert to their previous levels, they’ll be left with $400k in protection ($100k apiece plus $200k in a joint account).
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (693)
- Dish Network Customer Service SUCKS (536)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (329)
- How Much Should You Pay a Babysitter? (286)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (236)
- Will Mac OS X Lion Kill Quicken 2007? (191)