Computerized Investing > November/December 2008

On the Internet: Is My Bank Safe?

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With all of the bank failures and mergers and the $700 billion (and growing) government bailout, many people are wondering if their bank will be next. Most investors, even in the face of a bank failure, do not need to worry. The Federal Deposit Insurance Corporation (FDIC) guarantees bank deposits while the National Credit Union Administration (NCUA) covers deposits at credit unions. These types of insurance cover funds in deposit accounts including checking, savings and money market accounts and certificates of deposit.

Typically, the insurance covers deposits of up to $100,000 per account holder per bank. For example, a single account holder is covered on all deposits at one bank up to $100,000 and joint account holders are insured up to $200,000 for all deposits at one bank.

On October 3, 2008, Congress passed the Emergency Economic Stabilization Act of 2008, which required the FDIC and the NCUA to increase deposit insurance coverage from $100,000 to $250,000 per account holder per bank until December 31, 2009.

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