FDIC Consumer News
Important Update: Changes in FDIC Deposit Insurance Coverage
The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the recent changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.
Update on FDIC Insurance
Increase in $100,000 Limit Under Consideration for Retirement Accounts
As FDIC Consumer News went to print, Congress was close to adopting
legislation that would raise the federal insurance limit for certain
retirement accounts (Individual Retirement Accounts and other retirement
accounts for which you choose the FDIC-insured bank or thrift that
gets the deposit) from $100,000 to $250,000. Under the pending legislation,
coverage limits for all other consumer accounts would NOT be changed — the
standard insurance limit would remain at $100,000 per depositor. Any
changes in the insurance rules and their effective dates will be noted
on the FDIC Web site at www.fdic.gov.
(Editorís Note: After FDIC Consumer News went to print, Congress passed the legislation and President Bush signed it into law on February 8, 2006. The current FDIC insurance coverage remains the same until the FDIC adopts the necessary rule changes later in 2006. Watch for more information in future issues of FDIC Consumer News.)
Expanded FDIC Insurance for College Savings Accounts
A new rule from the FDIC provides that people who place "529-plan" college
savings into bank deposits are better protected against loss if the
bank were to fail. State-sponsored 529 plans (named after section
529 of the Internal Revenue Code) are tax-advantaged accounts that
help families and individuals save for higher education expenses.
Under the new rule, deposits that a 529-plan administrator places
at a bank on behalf of many different individuals are federally insured
up to $100,000 for each participant, not to $100,000 for all of the
participants combined. While most states don't allow participants
to have their 529-plan money placed in bank deposits — they
instead limit the choices to investments such as stocks and bonds — several
states have begun adding bank deposits as an option. The rule took
effect December 27, 2005.