We’re one month into the New Year, and for many, the start of 2009 has brought with it the hope that we’ll soon be back on the road to a stronger financial outlook here in the United States.
But recently, a bank within our region closed, causing concern among depositors about the safety of their funds. Consumers and business owners have worked hard to earn those dollars, and it’s times like these that they need assurance that those funds are protected.
In the event that you may be uncertain about the financial soundness of your banking institution and the protection of your money, information from the Federal Deposit Insurance Corporation should help put you at ease.
On Oct. 3, 2008, FDIC coverage increased for deposit insurance. Under the new program, single accounts (owned by one people) are covered up to $250,000, joint accounts (owned by two or more persons) are covered up to $250,000 per owner and Individual Retirement Accounts are covered up to $250,000 per owner.
These examples illustrate the most common ownership categories and assume that all FDIC requirements are met. These coverage increases remain in effect through Dec. 31, 2009.
And the FDIC most recently introduced a Transaction Account Guarantee Program, which guarantees all noninterest-bearing checking accounts, Negotiable Order of Withdrawal accounts that pay no more than 0.50 percent on the rate of interest and all Interest on Lawyers’ Trust Accounts will be fully insured for the entire amount that remains in the account.
Coverage under the TAGP is in addition to and separate from the coverage available under the FDIC’s general deposit insurance rules.
For example, if a depositor has $500,000 in a noninterest-bearing transaction deposit account and $250,000 in a certificate of deposit, the FDIC’s increased coverage – along with the TAGP –would fully protect the entire amount of $750,000. The TAGP coverage is scheduled to last through Dec. 31.
It is a wise decision for banks to participate in the TAGP coverage to ensure their clients’ funds are fully protected, but participation does come at a cost to the bank. Consumers should check directly with their banks to learn at what level their funds are protected.
In addition, the FDIC has created an excellent resource that allows depositors to view all of their current accounts at one place and obtain information on whether those accounts are protected. Depositors can visit www.myFDICinsurance.gov to get started.
Kristy Weaver is senior vice president and Southwest Washington team leader at Pacific Continental Bank.
