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FDIC Consumer News
Important Update: FDIC Insurance Coverage Increased in Late 2008
In the fall of 2008, Congress temporarily increased the basic FDIC insurance coverage limit from $100,000 to $250,000 through December 31, 2009. In addition, the FDIC simplified the rules for the calculation of deposit insurance coverage for revocable trust deposits, including an expanded definition of the "eligible beneficiaries" for additional insurance coverage. As a result, certain previously published information related to FDIC insurance may not reflect the current insurance coverage. For more information, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, the number is 1-800-925-4618.
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Winter 2004/2005
The FDIC Always Pays 100 Percent of Insured Deposits if a Bank Fails
Q: My investment advisor told me that if my bank fails, the FDIC could take up to 99 years to pay my insured deposit accounts. He also told me that the FDIC only covers principal, not interest, and only pays 17 cents for each dollar in an account. Is this correct?
 A: No, the information you received from your financial planner is definitely NOT correct. In the unlikely event that a bank were to fail, federal law requires the FDIC to pay 100 percent of the insured deposits — including principal and interest — "as soon as possible" after an insured bank fails. Historically, the FDIC pays insured deposits within a few days after a bank closes, usually the next business day. In most cases, the FDIC will provide each depositor with a new account at another insured bank. Or, if arrangements cannot be made with another institution, the FDIC will issue a check to each depositor.
Also, while the basic insurance limit is $100,000 per depositor per insured bank, this coverage is applied separately to funds held in different ownership categories. If, for example, you have some funds in single accounts, some in joint accounts, and other money in other categories of accounts, you can have well above $100,000 at the same bank and still be fully insured by the FDIC.
Got questions about deposit insurance or other consumer protections? Get answers by going to the FDIC's Web site at www.fdic.gov or contacting the FDIC at the phone numbers or addresses listed on the For More Information page.
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