FDIC Covers Unlimited Funds - On Some Accounts

The FDIC provided more details on increased coverage levels today. They will provide unlimited insurance protection for funds in participating banks.

The program provides coverage for "non-interest bearing deposit transaction accounts" - but your savings accounts and CDs do not get unlimited protection. They're targeting non-interest bearing transaction accounts to protect small businesses using small banks. Businesses often keep more than $250,000 in those accounts to cover payroll and other expenses.

For the first 30 days of the program, all FDIC insured banks enjoy the protection. After that, banks must opt-out if they do not want to offer unlimited protection. The program is expected to be self-funded (instead of taxpayer funded), as banks will have to pay an additional 10 basis points for unlimited coverage.

If your bank participates in the program, unlimited insurance coverage will last until December 31, 2009.

If you've got a lot of money at the bank, it's worth your time to call them and verify that you're properly covered.

Further reading:

• FDIC Fact Sheet – Temporary Liquidity Guarantee Program
• How FDIC Insurance Works
• Maximizing FDIC Coverage