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CONSUMER BANKING

What to Know About Your Accounts

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Wednesday, July 16, 2008

Consumers have lots of questions about their bank accounts in light of the troubles at IndyMac and other institutions. Staff writer Nancy Trejos sought some answers.

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Q If you have money in a bank, how safe is it?

AIf you have $100,000 or less in your name in any one bank, you have nothing to worry about. The Federal Deposit Insurance Corp., an independent agency of the federal government, will insure up to $100,000 per depositor per insured bank or savings association. That said, there are ways to protect more than $100,000 even if it's all stashed in one bank, depending on the account's ownership category. The most common categories are single accounts, joint accounts, certain retirement accounts and revocable trust accounts. If, for example, you have a single account under your name and a joint account with different names on it, you might be able get insured for more than $100,000. "There's a variety of scenarios that you can come up with to [get] the maximum insurance for that person," said LaJuan Williams-Dickerson, a spokeswoman for the FDIC.

And if you have certain types of retirement accounts, you could get even more insurance. Individual retirement accounts, or IRAs, for instance, are insured up to $250,000 per depositor per insured bank.

Williams-Dickerson said each person's situation is different. She advises any consumer who wants to calculate his or her insurance coverage beyond $100,000 to go to http://www.fdic.gov and click on the Electronic Deposit Insurance Estimator, also known as EDIE. You can also call 1-877-ASK-FDIC.

If that's not reassuring enough, talk to the branch manager at your bank, said Bert Ely, a banking consultant in Alexandria. "Explain the situation and say, 'Here are my accounts, the type of structure they're in. Do I have any exposure?' "

What exactly does the FDIC insure? What does it not insure?

The FDIC insures, up to $100,000, all deposits at insured banks and savings associations. That includes checking, NOW and savings accounts, money-market deposit accounts and certificates of deposit.

The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if you bought these products from an insured institution.

What if you have uninsured funds? What happens when a bank fails? Do you have any hope of recovering that money?

There is hope. Although you are only guaranteed protection on up to $100,000, in past bank failures, many people have been able to recover some, or even all, of their uninsured money, Williams-Dickerson and other experts said.


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