It pays to know how much of your bank deposits are protected
By Michelle Singletary
These days, having your bank account insured by the federal government is comforting.
That's because it's rare to see a bank fail and many depositors don't have enough in their accounts to even come close to going over the insurance protection limits if their bank should go under.
If you have amassed a significant amount of money and it's in an institution insured by the Federal Deposit Insurance Corp. or the National Credit Union Share Insurance Fund, do you really know how much of it is protected?
Probably not and I wouldn't fault you if you didn't. Even some bank employees get it wrong, as one reader suspected.
"On several occasions at several different banks I have been told that the limit on insured accounts for my wife and I is a total of $200,000 irrespective of 'ownership categories,' " the reader wrote. "Specifically, I have been told that my wife and I could have a single account insured for $100,000 each, but that opening another joint account would not extend the insurability of our deposits beyond that combined $200,000."
There has been a heightened interest in deposit insurance coverage because, for the first time in 25 years, the limit for retirement savings accounts was increased to $250,000, up from $100,000, effective April 1. That news left many of my readers with questions about the new limits and the old ones.
To help answer these questions, I asked the FDIC. To those who wanted to double-check, the basic insurance limit for deposits in banks, thrifts and credit unions is still $100,000 per depositor per insured institution.
So what about the reader who was told that the insurance coverage for him and his wife was limited to $200,000?
That information was incorrect, according to Kathleen Nagle of the FDIC's division of supervision and consumer protection.
Perhaps we all need to take the following to the bank:
So a husband and wife could have up to $400,000 in FDIC insurance coverage at the same bank simply by placing the money into three deposit accounts — $100,000 in his name alone, $100,000 in the wife's name alone, and $200,000 in a joint account for the two of them.
For more information go to www.fdic.gov or call (877) 275-3342.
You may never have to worry about relying on the government insurance for your deposit accounts, but you never know. And since you don't know, take the time to determine how much of your money is protected.
Contact Michelle Singletary at singletarym@washpost.com.
