What to Know About Increased FDIC Insurance for Retirement Accounts by Kathleen Nagle, Chief of the Deposit Insurance Section, Federal Deposit Insurance Corporation, Washington (NAPSA)—Forthefirst time in more than 25 years, Congress has raised the limit on federal deposit insurance coverage, which pro- people; business accounts; and employer-sponsored pension or profit-sharing plans—each qualify for separate insurance coverage of $100,000 (as much as $400,000 combined). In addition, trust accounts may qualify for separate insurance coverage of $100,000 per beneficiary (not per depositor) if certain conditions are met. And remember, tects against loss if a banking institution fails. However, the higher insurance limit only applies to certain kinds of retirement accounts that people may have at banks and savings associ- ations insured by the Federal Deposit Insurance Corporation (FDIC) and at credit unions insured by the National Credit Union Administration (NCUA). The FDIC wants bank customers to know what’s new and h q > x = \ } you may have there. This can be the total is insured up to $250,000, separately from any other deposit banks and savings associations soon will be insured up to accounts you may have at the sameinstitution. With FDIC coverage for retirement accounts raised to $250,000, more Americans whorely on banking institutions for safety and easy erage applies primarily to tradi- pletely protected if their financial what hasn’t changed. 1. Certain retirement accounts at federally insured $250,000, up from $100,000 previously. The higher insurance cov- access will know that more of their money for retirement will be com- tional and Roth IRAs (Individual Retirement Accounts). Also included are self-directed Keogh institution were to fail. There’s also the added convenience for people employer-sponsored “defined con- state government employees, and full coverage of retirement deposits of more than $100,000. 401(k) accounts. In general, self- $100,000. However, as before, accounts, “457 Plan” accounts for tribution plan” accounts that are self-directed, which are primarily who, previously, might have gone to more than oneinstitution to get 2. Other deposit accounts are still insured up to at least directed means the consumer chooses how and where the money there are ways to qualify for more than the basic coverage all deposits at a single banking institution that are held in this savings accounts in your name is deposited. Under the FDIC’s new rules, which take effect on April 1, 2006, broad category of retirement accounts are added together and under the new rules, yourselfdirected retirement accounts at the same institution are insured by the FDIC to $250,000 separately from any other accounts at one insured institution. For example, four distinct categories of accounts—checking and alone that are not retirement accounts; checking and savings accounts held jointly with other confusing, so to learn more about how to qualify for additional insurance coverage contact the FDIC aslisted below. 3. The insurance limits could rise in the future, but not until 2011, if at all. The new law establishes a method for authorizing an increase in the insurance limits on all deposit accounts (including retirement accounts) every five years starting in 2011 and based, in part, on inflation. Otherwise, your accounts will continue to be insured just as described. For More Information: Start by going to the FDIC Website at www.fdic.gov to find consumer resources, including the brochure “Insuring Your Deposits” and the Electronic Deposit Insurance Estimator (EDIE), an interactive tool allowing you to get a summaryof your FDIC coverage. Or call toll- free 1-877-ASK-FDIC (1-877-2753342) Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, call 1-800-925-4618.
