Is Money in a Checking Account FDIC Insured?
If you have money in a checking account, FDIC insurance can keep it safe. However, not all savings institutions have FDIC insurance, and not all checking accounts are insured. Whether you have insurance depends on a variety of factors including the type of institution and how you title your accounts. The government changes the insurance rules from time to time and has even temporarily improved coverage for checking accounts.
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FDIC Institutions
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The Federal Deposit Insurance Corporation only covers deposits at member banks. You can check whether your savings institution belongs to the FDIC on the government's "Bank Find" website or by looking for the FDIC logo at your bank. The FDIC does not insure your deposits at credit unions. The National Credit Union Association insures accounts at member credit unions.
Basic Insurance Rules
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The FDIC gives each depositor a basic $250,000 in insurance coverage for each ownership category in each insured institution. By ownership category, they do not mean checking account, savings account or CD account. Category refers to single account, joint account, IRA account and so on. If you have a checking account with $250,000 in your name only, you have reached the limit of your insurance for single checking accounts under normal circumstances.
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Increasing your Insurance
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You can increase your potential insurance for your checking accounts at the same institution by taking title to them in different ways. For example, if you have a checking account in your name and another jointly with your spouse, you have $250,000 insurance for the first account and $250,000 for each of you for the second. This makes a total of $750,000 in insurance.
Estimating your Insurance
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The FDIC has provided a Electronic Deposit Insurance Estimator, or EDIE the Estimator, to help you compute your coverage. Use the link in Resources to navigate to this page. Enter your checking accounts, as well as all your other accounts before calculating your insurance. You must enter the title or names on the accounts correctly to get a correct estimate of your insurance coverage. Note that an asterisk marks a temporary exception for checking accounts.
Temporary Coverage of Checking Accounts
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The FDIC has established additional temporary insurance for some checking accounts. The FDIC will insure checking accounts that do not pay interest and NOW (negotiable order of withdrawal) accounts paying 0.25 percent or less with no limit until Dec. 31, 2010. This exception applies only to FDIC member banks that have not opted out of the special program, called TAG. Follow the link in Resources to find out what banks have opted out. After Dec. 31, 2010, the FDIC will give unlimited coverage to non-interest-paying checking accounts until Dec. 31, 2012 at all FDIC member institutions.
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References
Resources
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