7 Things Seniors (and Everyone Else) Should Know About FDIC Insurance

Older Americans have their money ... ... and their confidence in the FDIC-insured bank accounts because they want to be calm on the savings that we worked so hard over the years accumulate. Here are some things seniors should know and remember about FDIC insurance.

1. The basic insurance limit is $ 100,000 per depositor per insured bank. If you or your family have $ 100,000 or less in all your deposit accounts at the same insured bank, you do not have to worry about their insurance coverage. Your funds are fully insured. Your deposits in banks are separately chartered separately insured, even if the insured bank, as belonging to the same parent company.

2. You may be entitled to more than $ 100,000 in coverage at one insured bank if you own deposit accounts in different ownership categories. There are several different ownership categories, but the most common for consumers as a single ownership accounts (for one owner), joint ownership accounts (for two or more people), self-directed retirement accounts (individual retirement accounts and Keogh accounts for which you choose how and where the money is deposited) and revocable trusts (a deposit account saying the funds will go to one or more named beneficiaries when the owner dies). Deposits in different ownership categories are separately insured. This means that one person can have more than $ 100,000 of FDIC insurance at the same bank where the funds are in separate ownership categories.

3. A death or divorce in the family can reduce the FDIC insurance. Let's say two people own account and one dies. The FDIC rules allow six-month period after the death of the depositor, the survivors or estate executors a chance to restructure accounts. But if you fail to do six months, the risk of the accounts takes place over $ 100,000 limit.

Example: a man and a woman have a common account "right of survivorship," Common provisions of joint accounts specifying that if one person dies another all their own money. The account totals $ 150,000, which is fully insured because there are two owners (which is up to $ 200,000 to cover). But when one of the two co-owners dies the surviving spouse does not change the account within six months, $ 150,000 deposit automatically would be insured only to $ 100,000 as the surviving spouse's single-ownership account, together with all other accounts in that category in Bank. Result: $ 50,000 and more would be over the limit of insurance for risk of loss if the bank failed.

Also be aware that the death or divorce of a beneficiary of trust accounts can reduce insurance premiums immediately. There is a period-six months in these situations.

4. No depositor has lost a single cent FDIC-insured funds as a result of a failure. FDIC insurance only comes into play when the FDIC-insured banking institution fails. And, fortunately, failed banks are now rare. This is largely because all FDIC-insured banking institutions must meet high standards for financial strength and stability. But if your bank were to fail, FDIC insurance will cover your deposit accounts, dollar for dollar, including principal and interest, up to a limit of insurance. If your bank fails and you have deposits over $ 100,000 federal insurance limit, you may be able to restore some or, in rare cases, all of your uninsured funds. However, the vast majority of depositors at failed institutions are within the insurance limit of $ 100,000.

5. The FDIC deposit insurance guarantee is rock solid. Since the mid-2005, FDIC had $ 48 billion in reserves to protect depositors. Some people say that I said (usually marketing investments, which compete with bank deposits), the FDIC does not have funds to cover depositors' insured funds if an unprecedented number of banks was to fail. This is false information.

6. FDIC pays the depositors quickly after the failure of the insured banks. Most insurance payments in a few days, usually the next working day after the bank closed. They do not believe that spread misinformation, some investment sellers who claim that the FDIC takes years to pay insured depositors.

7. You are responsible for knowing your deposit insurance coverage.

I know the rules, to protect their money.