In the last week there have been more changes in the federal deposit insurance coverage than any time I can remember. I thought it would be useful to summarize the changes for both the FDIC and NCUA. Both are still updating their documentation, so we'll see more official details soon.
As I reported on Friday the basic coverage limit has increased from $100,000 to $250,000. This coverage took effect on October 3, 2008 and will stay effective through December 31, 2009.
Here are examples the FDIC provides:
- Single Accounts (owned by one person): $250,000 per owner
- Joint Accounts (two or more persons): $250,000 per co-owner
- IRAs and certain other retirement accounts: $250,000 per owner (no change)
- Trust Accounts: $250,000 per owner per beneficiary subject to specific limitations and requirements
The NCUA has announced that it has also increased share insurance protection to $250,000 for the same timeframe as the FDIC. They are currently working to update their documentation.
POD Account Changes
As I reported in this post the FDIC released new interim rules on September 26th which eliminates the concept of qualifying beneficiaries, so that coverage is based on the naming of virtually any beneficiary. This new rule is now in effect. Unlike the change that increases coverage to $250K, this rule does not have an end-date.
Last Friday, the NCUA announced the same interim rule, and it's now in effect. The NCUA describes the details of this rule in a document located at: https://www.ncua.gov/RegulationsOpinionsLaws/RecentFinalRegs/745-ShareInsurance.pdf (edit: subsequently removed).