If you have a significant amount of assets, you are going to want to make sure that your wealth is protected if the financial institutions that you work with go under. Here’s how to maximize the coverage your FDIC insurance offers you.
Currently, the FDIC is offering customers of banks that participate in the FDIC program $250,000 of coverage across all of their accounts at a given bank through 2013. After that, the FDIC will only insure $100,000 per customer per bank. The NCUA offers similar coverage for credit union customers.
The easiest way to maximize your coverage is to make sure that you have no more than $250,000 in a given bank. You can open multiple accounts and multiple banks, and you will have $250,000 worth of coverage in each bank that you have an account with, so if you keep less than $250,000 in each bank, your money will be fully FDIC insured. Depositing in different accounts in different branches will not provide you additional coverage, your deposits must be spread across different financial institutions.
You can also increase your coverage by having a joint account with a spouse or family member. If you and your spouse have an account with a bank, you will both get $250,000 worth of coverage in the account, so the total insurance for the account will be $500,000.
Finally, depositors with large amounts of money can participate in the CDARS program, which stands for Certificate of Deposit Account Registry Service, which will allow customers to have one bank, but have those deposits spread across a number of different banks, each with a $250,000 insurance policy, make it so that you can have a savings vehicle for large dollar amount that is insured by the FDIC.
Most consumers will not come near these deposit limits, but those who need to be aware of these limits have not done an effective job of making their funds insured. With many of the banks that have failed, consumers have lost millions of dollars worth of uninsured funds.