Yesterday, the FDIC announced that basic coverage (i.e. on regular deposit accounts) would be permanently increased to $250,000. Until now, the increase from $100,000, which was instituted at the height of the financial crisis, had been temporary, expiring on December 31, 2013.
Here’s an excerpt from FDIC chief, Sheila Bair that was included with the FDIC”s press release.
With this permanent increase of deposit insurance coverage to $250,000, depositors with CDs above $100,000 but below $250,000 will no longer have to worry about losing coverage on those CDs maturing beyond 2013. We strongly encourage all bank depositors who have questions about their insurance coverage to go to our Web site at www.fdic.gov and use our Electronic Deposit Insurance Estimator (EDIE) or call our toll-free number at 1-877-ASK-FDIC. Insured deposits provide the comfort and peace of mind to depositors that their money is 100 percent safe – provided they keep their deposit balances within the insurance limits.
Click here for the entire press release.
Another measure taken in those dark days was to offer FDIC protection, with no limit on dollar amounts, on certain types of accounts, including low- to no-interest checking accounts. That is set to expire at the end of the year, but there is the option to extend it. In this era of safety nets and national nanny-ness, I’d say there are decent odds of it at least being renewed.
10:17 am update, courtesy of Gary Shearer
The Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by President Barack Obama today permanently raised the maximum deposit insurance amount to $250,000. In addition, the Act made this increase retroactive to January 1, 2008.
The provision making the law retroactive means that the $250,000 deposit insurance amount applies to banks that failed between January 1 and October 3, 2008. These insured institutions are:
Hume Bank, Hume, MO
ANB Financial, N.A., Bentonville, AR
IndyMac Bank, F.S.B., Pasadena, CA
First Priority Bank, Bradenton, FL
The Columbian Bank and Trust Company, Topeka, KS
Silver State Bank, Henderson, NV
This retroactive increase has reduced the number of uninsured depositors at these failed institutions from more than 10,000 to approximately 500.
That’s 9,500 depositors with uninsured deposits who now have insured deposits. You are forgiven for wondering if that change had anything to do with making certain voters happy.