Try to have all your money insured; DOLLARS & SENSE


Exactly how much insurance does the Federal Deposit Insurance Corp. now provide on bank deposits?

I have a checking account, two CDs, all in my name.

Am I insured only once, or are all three accounts insured for $100,000 individually?

M. W., Warrenville, S.C.

Only once. Here's why:

The Federal Deposit Insurance Corp. (FDIC) provides up to $100,000 in insurance coverage per depositor, per account category, per institution.

Coverage doesn't apply to each account.

Instead, it applies to each account category, and there are several such categories.

For instance, there's one for your individually owned accounts, another for joint accounts in which you have deposits, one for your retirement accounts (such as IRAs and self-directed Keogh accounts) and one for testamentary accounts (payable-on-death, or POD accounts).

Each of these account categories gets insured for up to $100,000. "Deposits maintained in different categories of legal ownership are separately insured," according to a newly revised FDIC publication.

How does all this apply to you? It sounds as if your checking account and certificates of deposit (CDs) are all at the same bank, and you are the sole owner. So, all your accounts fall under one category, the individual ownership category.

Remember that a $100,000 insurance limit applies separately to each ownership category. You have only one ownership category into which all your deposits fall -- the individual ownership category.

As a result, the most in federal deposit insurance coverage you now have is $100,000; anything above that would be considered uninsured should your bank fail.

To qualify for more coverage, you could move some money to another bank.

But you need not go to the trouble; you can get more insurance coverage at the same bank simply by shifting some of your money into a separate account category at the bank you now use.

For example, if you move some of your money into a jointly owned account, you'd technically be moving it into the joint account category.

This would automatically qualify you for an additional $100,000 in coverage.

In a recent FDIC newsletter, the agency gave this example: "If you have $100,000 in an individual account and $100,000 in your share of a joint account at the same bank, you're covered to $200,000, not $100,000."

The same principle applies if you move some money into a testamentary account, for example.

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