Estate Planning as a Career

Lately the stock market has been a very volatile ride. This past year’s performance has been poor and with the rising fuel costs and credit crises these investment vehicles seem suspect. Certificate of deposit (CD) rates are not the best they have been but there are still bargains available from banks trying to build strong deposit reserves. Very conservative investors like CDs because most are insured with the Federal Deposit Insurance Corporation (FDIC). FDIC insurance allows account holders to get their money back in case of the insured banks failure. However, understanding how much and what is covered can difficult to understand. Talk with three different bankers at three FDIC insured banks and you will get a variety of answers to questions regarding whether your money is fully insured or not. If you have less than $100,000.00 in an FDIC insured bank you are fully insured. That is if your account is some sort of demand deposit account (i.e. checking, money market), savings account, or time deposit account (CDs). The insurance covers the balance of these accounts, principal and interest earned up to the day of the insured bank’s closure. This is a very good thing to have especially with the state of today’s economy and the challenging circumstances financial institutions are facing.

As stated before “the basic insurance amount is $100,000.00 per depositor per insured bank.” (FDIC-001-2007). Owners of specific IRA accounts are insured up to $250,000.00. A CD for Ms. Bank Customer is insured to $100,000.00, that same CD in an IRA is insured to $250,000.00 in an insured bank. An IRA with mutual funds as its primary investment is not insured under FDIC. Up to now it has been pretty straightforward regarding coverage.

The problem develops when bank customers have more than $100,000.00 in deposits. There are ways to increase the (more…)