How to Have the FDIC Insure Over Their $100,000, Limit

While it is well known that the Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to a certain limit, what is not so well known is that there is a method to ensure safety for amounts over the limitations. Why would this information be useful? Americans today most likely have more than the allowable limit in accounts when it comes to federally insured funds. So how do you, if you are one of these people, make the most of this rule while keeping your money safe?

Make a list of all your accounts, their amounts, locations and the rules of deposit. This will give you a complete picture of your assets and vulnerability. One of the first things you will want to do is break down the total deposits into bundles of $100,000 or less. Even though the FDIC has raised limits until December 2009, this allows you to fall within their old guidelines to be guaranteed safe.

Make a list of your family members next; be sure to include children, parents, and any other close relatives. In most cases you will only need four family members to insure up to one million dollars.

Get a copy of the regulations for the FDIC, in them you will see how you can work around the regulations and limitations by using different types of accounts.

Use one of 8 different account categories to insure your money. Besides having single accounts, there are joint accounts, certain retirement accounts, trust accounts, government accounts and others

Making your accounts a family affair is simple. Both you and your spouse have single accounts up to $100k. As a married couple you can also have a joint account insured up to $200k. If you have children, you can then also set up a trust with them as beneficiaries and those are also insured up to $100k per child, and you have legal use of the money as guardian. Open a trust with each parent being a separate guardian for the child. Add an Individual Retirement Account (IRA) for both you and your spouse and you have another $200k insured. You are also allowed to have both a savings account and a checking account per person covered under the federal insurance limits. This would mean that both you and your spouse can individually have $200k and still be insured without problems. Here is a breakdown of how this works out.

1.You - one savings and one checking account ($200,000)

2.Your Spouse - one savings and one checking account ($200,000)

3. Joint Accounts - one savings and one checking account ($200,000)

4. Trust Accounts - one per child/parent guardianship; using both you and your spouse as individual guardians ($200,000)

5. Individual Retirement Account - for both you and your spouse ($200,000)

This gives you up to one million dollars in protected assets at one bank. You can repeat this method at any number of banks and still have protected assets.

Opening other types of retirement accounts as well as Certificates of Deposit (CD's) can also bring more of your money into the guardianship of FDIC insurance. Check with your local financial institution.

Be aware that the only types of insured bank products are savings, checking, trust, and most retirement accounts. Mutual Funds, Bonds and other investment tools are NOT covered by the FDIC rules.