How Safe Is Your FDIC-Insured Bank?

The FDIC bank insures up to $250,000 on checking accounts, savings accounts, and time deposits. Investments including annuities and other securities are not included in the FDIC coverage. Certificate deposits in IRAs are covered, however mutual funds are not covered by the FDIC insurance.

This $250,000 limit is scheduled to be reset to the $100,000 limit extended through 2013. One of the countervailing factors for the economic downturn was the increasing of the FDIC insurance coverage to $250,000 per qualified or non qualified account. That means that a single individual can be insured up to $500,000 for their checking and savings accounts.

For securities there is a separate agency that replaces lost securities for up to $500,000 for securities and $100,000 in cash. This is outside of the faith and full credit of the banks.

The major advantage to the FDIC insurance is that it is insurable for a lot of money in the case of a bank fallout. However, with this added insurance comes greater government spending support. That's why the FDIC-insured banks would be much safer during the times when government spending is higher; hence, the higher insurance limit amount for the banks.