How to ensure a lock on your deposits

WASHINGTON — The Federal Deposit Insurance Corp. last week launched a Web site — — to explain to consumers exactly how much of the money they have in deposit accounts is protected.

As the financial crisis worsens, many consumers have been asking what would happen if their bank fails. The FDIC, an independent government agency, has 117 banks on its list of troubled institutions. That is up from 90 in the first quarter of this year. Most of those banks will not fail, said FDIC spokesman Andrew Gray. Each year only 13 percent of the problem banks fail, he said.

Here are answers to some questions you might have:

Q: How safe is the money I've deposited into my bank account?

A: If you have $100,000 or less in your name at any FDIC-insured bank or savings association, you have nothing to fear. If you have certain types of retirement accounts, such as an individual retirement account, you're eligible for even more coverage — up to $250,000 per account owner, per insured bank. Deposits at credit unions have similar coverage through the National Credit Union Administration, an independent government agency.

Q: What if I have more than $100,000 in deposits? Is there any way to get more coverage?

A: Yes. If you keep your deposits in accounts under different ownership categories, you will be fully insured even if the sum of all the different pots of money exceeds $100,000. There are eight different ownership categories, including single accounts, joint accounts, revocable trust accounts and employee benefit plan accounts.

The FDIC has a tool called the Electronic Deposit Insurance Estimator, known as EDIE, that helps you calculate your coverage. The agency debuted a more user-friendly version of it last week on its new Web site. You also can call 1-877-ASK-FDIC.

If you don't want to go through all those calculations, you can always separate your money among one or more FDIC-insured banks.

Q: What types of accounts are covered?

A: FDIC insurance applies to all types of deposits at an insured institution, including those in checking accounts, savings accounts, so-called NOW accounts, money market deposit accounts and time deposits such as certificates of deposit.

If a bank fails, you will get the balance of the account up to the insured limit, including the principal and any interest accrued up to the date of the bank's closing.

The FDIC won't cover money invested in stocks, bonds, mutual funds, life insurance policies, annuities and municipal securities, even if you bought those investments at an insured bank. U.S. Treasury bills, bonds and notes also are not insured by the FDIC because they already have the backing of the U.S. government.

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