The FDIC protects deposits when an insured depository institution fails and is closed by the state or federal banking regulator that chartered it. While the basic federal insurance amount is $100,000, you actually can receive more than $100,000 of coverage if your funds are maintained in different ownership categories. For example, you can have coverage of up to $100,000 for your individual accounts at the bank, another $100,000 for your share of joint accounts at the same bank, and yet another $100,000 for your retirement accounts there.

What else factors into the $100,000 coverage? It includes principal (what you put into the account) plus interest earned to date. Note, however, that some FDIC-insured CDs recently being offered by financial institutions or sold through deposit brokers have unusual features that may result in the FDIC protecting only the principal during the term of the CD. An example is a five-year CD whose interest rate is not fixed but varies with the ups and downs of the stock market; that has no guaranteed minimum interest rate you'll earn; and pays interest only when the CD matures in five years instead of accruing on a daily or monthly basis. "If you have that kind of CD and the institution fails," says FDIC attorney Joe DiNuzzo, "federal insurance would cover only your principal, not any interest, because there is no specific, guaranteed interest you've actually earned under the terms of your contract."