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FDIC calms depositors' jitters, extends $250K coverage

12-3-09 - The FDIC has announced that it will extend increased coverage through Dec. 13, 2013. With the economy still in precarious shape, the FDIC's move should help calm investors. Insurance will remain at $250,000 per depositor, per institution for another four years. On Jan. 1, 2014, it is anticipated insurance will revert to its pre-2009 level of $100,000 per depositor, per institution.


The $250,000 coverage works a little differently for assets owned by your revocable trust. In this case, the $250,000 coverage is per beneficiary on a proportionate basis. As an example: You have $1,250,000 in a revocable trust at Bank A and five beneficiaries of your trust.If each beneficiary gets an equal share ($250,000), then the full $1,250,000 in your trust is protected. But if one beneficiary gets 50% of your assets ($625,000), that leaves $375,000 of his share unprotected ($625,000 - $250,000). FDIC protection would thus cover only $875,000 of your trust assets ($1,250,000 - $375,000) at Bank A.

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