October 7th, 2008
With a stroke of a pen, President Bush signed the Bail-out plan on Friday evening (10/3/08). A provision that was included was temporarily increasing the FDIC Insurance limit to $250,000. The increased limit is only in effect until 12/31/09. Congress would have to pass more legislation to make it permanent. The NCUA will follow suit so that federally insured credit unions will have the same coverage as the FDIC.
What this means for you: Any liquid accounts such as a checking, savings, or money market account at an FDIC insured bank or NCUA insured credit union are covered up to $250,000 until 12/31/09. Any CDs you have are also covered. You need to be careful with CDs though. If you invest in a new CD and it matures before or on 12/31/09, you will be covered up to $250,000 (assuming you have no other deposits). If it matures after 12/31/09, whatever amount is above $100,000 has the potential to be uninsured.
Personally I wouldn’t gamble that Congress will make the change permanent. I would only do CDs at the new maximum that mature before 12/31/09.
I will make a follow-up post regarding joint accounts and revocable trust accounts. It isn’t clear if the new limits apply to those or not. cd :O)
-- By +Chris Duncan