While it's looking increasingly less relevant, the recent extension of the $250,000 limit on interest bearing deposit accounts is still comforting. (It's important to remember that non-interest bearing deposit accounts are currently under unlimited insurance until the end of the year.) What this means is that under each title FDIC coverage applies for up to $250,000 - which would allow a household to hold interest bearing cash at an institution and exceed that limit - as long as the accounts are titled correctly.
The coverage was extended under the Helping Families Save Their Homes Act of 2009, which was signed by the President on May 20th. Included in the legislation was a provision that postpones until January 1, 2014 the expiration of the $250,000 limit on Federal Deposit Insurance Corp. (FDIC) insurance for bank deposit accounts. The limit was raised in 2008 from $100,000 per depositor at a given institution, and had been scheduled to revert to the previous $100,000 limit on December 31, 2009.
The legislation covers all account categories other than: (1) IRAs and certain other retirement accounts, which will continue to be covered up to $250,000 per owner after January 1, 2014, and (2) non-interest bearing transaction deposit accounts, which temporarily have unlimited coverage and are insured under the Transaction Account Guarantee Program, which is still scheduled to expire after December 31, 2009.
The Act also extended to January 1, 2014 the National Credit Union Share Insurance Fund's $250,000 share insurance coverage of accounts at credit unions.
Please give us a call if you would like to review your current cash accounts and their insurance status.
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