7 Things Seniors And Everyone Else Should Know About Fdic Insurance

7 Things Seniors (and Everyone Else) Should Know About FDIC Insurance
Older Americans put their money… and their trust… in​ FDIC-insured bank accounts because they want peace of​ mind about the​ savings they've worked so hard over the​ years to​ accumulate .​
Here are a​ few things senior citizens should know and remember about FDIC insurance.
1 .​
The basic insurance limit is​ $100,​000 per depositor per insured bank .​
If you​ or​ your family has $100,​000 or​ less in​ all of​ your deposit accounts at​ the​ same insured bank,​ you​ don't need to​ worry about your insurance coverage .​
Your funds are fully insured .​
Your deposits in​ separately chartered banks are separately insured,​ even if​ the​ banks are affiliated,​ such as​ belonging to​ the​ same parent company.
2 .​
You may qualify for more than $100,​000 in​ coverage at​ one insured bank if​ you​ own deposit accounts in​ different ownership categories .​
There are several different ownership categories,​ but the​ most common for consumers are single ownership accounts (for one owner),​ joint ownership accounts (for two or​ more people),​ self-directed retirement accounts (Individual Retirement Accounts and Keogh accounts for which you​ choose how and where the​ money is​ deposited) and revocable trusts (a deposit account saying the​ funds will pass to​ one or​ more named beneficiaries when the​ owner dies) .​
Deposits in​ different ownership categories are separately insured .​
That means one person could have far more than $100,​000 of​ FDIC insurance coverage at​ the​ same bank if​ the​ funds are in​ separate ownership categories.
3 .​
a​ death or​ divorce in​ the​ family can reduce the​ FDIC insurance coverage .​
Let's say two people own an​ account and one dies .​
The FDIC's rules allow a​ six-month grace period after a​ depositor's death to​ give survivors or​ estate executors a​ chance to​ restructure accounts .​
But if​ you​ fail to​ act within six months,​ you​ run the​ risk of​ the​ accounts going over the​ $100,​000 limit.
Example: a​ husband and wife have a​ joint account with a​ right of​ survivorship,​ a​ common provision in​ joint accounts specifying that if​ one person dies the​ other will own all the​ money .​
The account totals $150,​000,​ which is​ fully insured because there are two owners (giving them up to​ $200,​000 of​ coverage) .​
But if​ one of​ the​ two co-owners dies and the​ surviving spouse doesn't change the​ account within six months,​ the​ $150,​000 deposit automatically would be insured to​ only $100,​000 as​ the​ surviving spouse's single-ownership account,​ along with any other accounts in​ that category at​ the​ bank .​
The result: $50,​000 or​ more would be over the​ insurance limit and at​ risk of​ loss if​ the​ bank failed.
Also be aware that the​ death or​ divorce of​ a​ beneficiary on​ certain trust accounts can reduce the​ insurance coverage immediately .​
There is​ no six-month grace period in​ those situations.
4 .​
No depositor has lost a​ single cent of​ FDIC-insured funds as​ a​ result of​ a​ failure .​
FDIC insurance only comes into play when an​ FDIC-insured banking institution fails .​
And fortunately,​ bank failures are rare nowadays .​
That's largely because all FDIC-insured banking institutions must meet high standards for financial strength and stability .​
But if​ your bank were to​ fail,​ FDIC insurance would cover your deposit accounts,​ dollar for dollar,​ including principal and accrued interest,​ up to​ the​ insurance limit .​
If your bank fails and you​ have deposits above the​ $100,​000 federal insurance limit,​ you​ may be able to​ recover some or,​ in​ rare cases,​ all of​ your uninsured funds .​
However,​ the​ overwhelming majority of​ depositors at​ failed institutions are within the​ $100,​000 insurance limit.
5 .​
The FDIC's deposit insurance guarantee is​ rock solid .​
As of​ mid-year 2018,​ the​ FDIC had $48 billion in​ reserves to​ protect depositors .​
Some people say they've been told (usually by marketers of​ investments that compete with bank deposits) that the​ FDIC doesn't have the​ resources to​ cover depositors' insured funds if​ an​ unprecedented number of​ banks were to​ fail .​
That's false information.
6 .​
The FDIC pays depositors promptly after the​ failure of​ an​ insured bank .​
Most insurance payments are made within a​ few days,​ usually by the​ next business day after the​ bank is​ closed .​
Don't believe the​ misinformation being spread by some investment sellers who claim that the​ FDIC takes years to​ pay insured depositors.
7 .​
You are responsible for knowing your deposit insurance coverage.
Know the​ rules,​ protect your money.

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