The recent failure of IndyMac, a California-based bank, brings up the question about bank account insurance.  How upset would you be if you were one of the customers with $100,000+ in your bank, but couldn’t get any of it?  Now’s a good time to review the basics of FDIC insurance and to examine each of your bank accounts.

What the FDIC Insures

The FDIC – Federal Deposit Insurance Corporation – is a U.S. government agency that insures bank deposits in the event of a failure.

Checking accounts, CDs, savings accounts, and money markets accounts are insured for $100,000.

Retirement accounts are covered up to $250,000.

  • IRAs
  • Section 457 deferred compensation plan accounts
  • Self-directed defined contribution plan accounts
  • Self-directed Keogh plan (or H.R. 10 plan) accounts

You can be covered for more than $100,000 if you have funds in different account categories: personal account, retirement account, joint account, or revocable trust account.

In a joint account, each account holder is insured for $100,000, so the account is insured for $200,000 total.  Joint savings and joint checking accounts are insured for a total of $200,000.  So, as a couple, you are insured for $100,000 in a checking account and $100,000 in a savings account.

What the FDIC Doesn’t Insure

  • Stocks
  • Bonds
  • Mutual funds
  • Life insurance policies
  • Annuities
  • Municipal securities

Any amount over the $100,000 for personal accounts, $200,000 for joint accounts, and $250,00 for retirement accounts is not insured.