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September 14, 2008

Is Your Money Safe?

-- by Dave Johnson

From the post below, a few emails came in that prompt me to post this: Is your money safe?

Click to see the FDIC rules for you bank deposits. Read these rules and make sure YOUR money is in bank accounts that are insured by the FDIC. You have no business having your money ANYwhere else right now unless you are a financial expert.

Single accounts, up to $100,000,

If a depositor's accounts at one FDIC-insured bank or savings association total $100,000 or less, the deposits are fully insured. A depositor can have more than $100,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements. In addition, federal law provides for insurance coverage of up to $250,000 for certain retirement accounts.

. . . All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $100,000.

Certain retirement accounts up to $250,000,

. . . The following types of retirement plan deposits qualify for coverage as certain retirement accounts.
-- All types of IRAs, including:
• Traditional IRAs
• Roth IRAs
• Simplified Employee Pension (SEP) IRAs
• Savings Incentive Match Plans for Employees (SIMPLE) IRAs
-- All Section 457 deferred compensation plan accounts, such as eligible deferred compensation plans provided by state and local governments, regardless of whether they are self-directed
-- Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE IRAs held in the form of 401(k) plans, self-directed defined contribution money purchase plans, and self-directed defined contribution profit-sharing plans
-- Self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals

All retirement accounts listed above owned by the same person in the same FDIC-insured bank are added together and the total is insured to $250,000.

Joint Accounts: Husband and wife joint account up to $200,000,

1. All co-owners must be people. Legal entities such as corporations, trusts, estates, or partnerships are not eligible for joint account coverage.
2. All co-owners must have equal rights to withdraw funds from the account. For example, if one co-owner can withdraw funds on his or her signature alone but the other co-owner can withdraw deposits only with the signature of both co-owners, the co-owners do not have equal withdrawal rights.
3. All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservator.

If all of these requirements are met, each co-owner’s share of every account that is jointly held at the same insured bank is added together with the co-owner’s other shares, and the total is insured up to $100,000.

(Meaning you are insured for $100K each, which totals $200K.)

Those are the main items of interest. But study the entire PDF that is available at the page I linked.

If you have more than this in a single bank move the amount that is above this into another bank and do it Monday morning. If you own 7 houses -- or if you don't know how many houses you own -- you aren't reading Seeing the Forest anyway.

Posted by Dave Johnson at September 14, 2008 5:59 PM


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