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Increased FDIC insurance – what does it mean to you?
With banks and the economy in the news so much lately, you may be thinking more
about the safety of your money. The information below explains the new changes and provides frequently asked questions to help you better understand FDIC insurance coverage.
Recent FDIC Changes
- The basic limit on federal deposit insurance coverage has been
temporarily increased from at least $100,000 to at least $250,000 per
depositor.
- Read More »
- But as always, a depositor may qualify for more than the basic insurance coverage at one insured bank because the FDIC provides separate insurance coverage for deposits held in different "ownership
categories," such as single and joint accounts.
- The basic FDIC insurance limit may return to $100,000 on January 1, 2014.
- Read More »
- That means all the deposits a consumer has at a bank
in his or her name alone will be fully insured up to $250,000 through
December 31, 2013. However, it is important to remember that additional coverage may be
available depending on how accounts are held, such as when deposits are
owned jointly with another person. The reduction in coverage starting in
2010 will not affect certain retirement accounts, which will continue to be
protected up to $250,000.
- The FDIC has eased the rule governing "revocable trust accounts"
that pass to named beneficiaries when the account owner dies.
- Read More »
- No longer does the FDIC consider only the account owner's spouse, child,
grandchild, parent or sibling as "qualifying beneficiaries" for additional
insurance coverage ($250,000 if there is one beneficiary, $500,000 if there
are two, and so on). Now, an account owner can name any person or
charity as a beneficiary and the owner will qualify for the additional deposit
insurance coverage.
- Through June 30, 2010, certain checking accounts at participating
banks will be fully insured by the FDIC, no matter how much money
is in them.
- Read More »
- This special insurance coverage applies only to no-interest
checking accounts and certain other low-interest transaction accounts,
and only at FDIC insured institutions.
Frequently Asked Questions
- What is insured by the FDIC?
- Until January 1, 2014, if a depositor's accounts at one FDIC-insured bank or
savings association total $250,000 or less, the deposits are fully insured. A
depositor can have more than $250,000 at one insured bank or savings
association and still be fully insured provided the accounts meet certain
requirements.
To help you meet these requirements use "EDIE," the FDIC's online deposit
insurance estimator. EDIE will help you understand if you have funds over the
insurance limits. Find it at www.FDIC.gov/EDIE. In addition, FirstMerit is participating in the Transaction Account Guarantee Program (TAGP) which provides additional coverage to specific accounts.
- How does FirstMerit's participation in the Transaction Account Guarantee Program (TAGP) effect me as a depositor of FirstMerit?
- Under the TAGP, the FDIC temporarily provides a full guarantee for funds held at FirstMerit in noninterest-bearing transaction accounts, regardless of the amount.
- What is meant by a "noninterest-bearing transaction account"?
- A "noninterest-bearing transaction account" is an account in which interest is
neither accrued nor paid and on which FirstMerit does not require advance notice
of an intended withdrawal. This includes traditional checking accounts that allow
an unlimited number of deposits and withdrawals at any time. This also includes low-interest NOW accounts.
- How long will the full guaranty be in effect?
- The coverage became effective on October 14, 2008, and will continue through December 31, 2009.
- Does the full guaranty apply to consumer accounts?
- Yes. It applies to all non-interest bearing transaction accounts held by any depositor.
- What if I have other accounts at FirstMerit?
- Here's an example of how the Program works:
If a consumer has a $250,000 certificate of deposit and a noninterest-bearing
checking account for $50,000, the accounts would be fully insured for $300,000
(assuming the depositor has no other funds with us). First, coverage of $250,000
would be provided for the certificate of deposit under the FDIC's general rules for
deposit insurance coverage (through December 31, 2013). Separately, full
coverage of the $50,000 checking account would be provided under the
Transaction Account Guarantee Program.
For Additional Information
This information was obtained from the FDIC website: www.fdic.gov.
"Your New, Higher FDIC Insurance Coverage" can be read or printed at
www.fdic.gov/consumers/consumer/news/cnfall08. To order up to two free paper copies,
use the online form on that same Web page or call the Federal Citizen Information
Center toll-free at 1-888-8- PUEBLO (1-888-878-3256) weekdays from 8:00 a.m. to 8:00
p.m. Eastern Time and ask for Department 89.
The information provided in this document is presented in a non-technical way and is not
intended to be a legal interpretation of the FDIC's laws and regulations on insurance
coverage. For greater detail concerning the technical aspects of insurance coverage,
depositors or their counsel may wish to consult the Federal Deposit Insurance Act (12
U.S.C.1811 et seq.) and the FDIC's regulations relating to insurance coverage (12
C.F.R. Part 330).
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