Comments on: Make the Most of Your FDIC Insurance Limits

By: Clair Schwan of Frugal Living Freedom

Clair Schwan of Frugal Living Freedom — Mon, 13 Apr 2009 02:46:31 +0000

This is good and current advice. I had a couple hundred thousand dollars that I wanted to hold in CDs, so I put them in my name and the name of my sister and mother. That covered them adequately between the three of us.

The potential danger of course is any owner of a CD can withdraw the money at any time for any reason because they are one of the owners. So, if you have multiple owners assigned to your assets, make certain you are very comfortable with those people.

By: Adam

Adam — Sun, 20 Jul 2008 03:17:00 +0000

@Philip – The $250,000 IRA limit is only good on the funds that are invested in the banks products. Many banks offer IRAs that can only be invested in the banks CDs or their money market accounts. If you use the banks brokerage to purchase stocks or mutual funds they will no longer be covered under the FDIC insurance. In terms of the money market accounts, if you have money in the banks money market account, you will get the FDIC insurance. If you buy a money market mutual fund (MMFA) with the banks brokerage, that will not be covered under the FDIC. I hope this answers all of your questions. If you would rather e-mail me more questions, feel free!

By: lisah

lisah — Fri, 18 Jul 2008 15:44:00 +0000

Thank you for such a clear and simple way to understand how the insurance works. Great blog!

By: traviswright

traviswright — Fri, 18 Jul 2008 13:32:00 +0000

I work at a bank and have never answered so many FDIC questions in my life. I may just start directing them to your blog for answsers…lol…

By: Philip

Philip — Thu, 17 Jul 2008 12:04:00 +0000

“IRA funds are insured separately from other types of accounts, up to a $250,000 limit” Taken directly from the FDIC site at http://www.fdic.gov/bank/individual/failed/IndyMac.html

Why would they create this distinction if the IRA funds are invested in stocks and other non-bank controlled funds?

Also, you mention in the article that Sergio has funds in Money Market accounts at the banks. I am not certain how money markent accounts work, are they in cash or are they funds that are invested? If invested why would they count towards the FDIC insured amount.

(I am sad that I will be missing the home football games this year. Moved to far away!)

By: Adam

Adam — Wed, 16 Jul 2008 20:52:00 +0000

Philip, great comment! 401(k)s and other retirement accounts are very different than typical bank accounts like savings and CDs. The banks that provide 401(k)s are typically just the trustee for the account, meaning they cannot loan out that money like they do for typical bank accounts. So in other words, they are not covered by insurance. This is because you control what you do with that money. You can put it in stocks, bonds, etc. These may go down to extent that you no longer have any money, but it is not the banks fault that it happened.

In terms of the Red Raiders, I think it’s going to be a good football season!

By: Philip

Philip — Wed, 16 Jul 2008 14:40:00 +0000

I know that IRA are safe up to $250,000 but what if I have money in a 401k over that amount with vanguard or other location. Is that FDIC insured against bank failure or what is happening there.

Go Red Raiders! (Always nice to see someone from Lubbock online)

By: Shari

Shari — Wed, 16 Jul 2008 02:26:00 +0000

Great explaination! I would also advise that any who has $100,000 would diversify and open accounts at more than one bank. Having $50,000 at two different banks is safer still.

By: Melissa P.

Melissa P. — Tue, 15 Jul 2008 21:20:00 +0000

is your email on this blog? i subscribed but wasn’t able to find your address to tell you…

By: Anu

Anu — Tue, 15 Jul 2008 18:41:00 +0000

I have subscribed to your blog via email. anu_r2k@yahoo.com. I didn’t know how to send an email to you, that’s why leaving a comment.