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Money Management

 
 

Higher FDIC Coverage for Retirement Accounts

 

Federal insurance protects depositors against loss if a banking institution fails. The Federal Deposit Insurance Corporation (FDIC) Board of Directors approved final rules that will raise the deposit insurance coverage on certain retirement accounts, primarily traditional and Roth IRAs at a bank or savings institution to $250,000, up from $100,000. 

This is the first increase in coverage in more than 25 years, and it became effective April 1. The basic insurance coverage for other deposit accounts, however, will remain at $100,000, but, as before, there are ways to qualify for more than the basic coverage at one insured institution.

Under the new law, insurance limits could rise in the future, but not until 2011. FDIC insurance does not cover investments such as mutual funds, stocks, bonds, life insurance policies and annuities, even if those were purchased from an FDIC-insured institution.

Source: FDIC Consumer News