"Sara" of Whitehaven, is sweating right about now.
"I have just found out that the $250,000 limit on insured funds at the bank will lift at the end of the year and go back to $100,000. I have a CD for $115,000 that will mature in March of 2010 and thus not all of it will be insured."
Actually, Sara, all of your CD's value will be insured. First, a little background:
Last year, President Bush signed a law to temporarily raise the limit on basic federal deposit insurance from $100,000 to $250,000 per depositor. The law was meant to ease tensions over the worsening economy.
The operative word here is TEMPORARILY. The extra protection expires in 2010.
But only basic accounts are affected, not retirement accounts, according to LaJuan Williams-Dickerson, spokesperson for the Federal Deposit Insurance Corporation (FDIC). She says all retirement accounts, including Sara's CD, have been and will continue to be insured up to $250,000. She says retirement accounts were not affected by last year's legislation.
But after Dec. 31, federal deposit insurance for basic accounts will drop back from $250,000 to a $100,000 maximum coverage level. Those accounts include:
* NOW (Negotiable Order of Withdrawal)
* MONEY MARKET
So Sara and other investors, your retirement accounts will still be insured up to $250,000 - now and beyond 2010.
Here's a release from the FDIC that is very helpful: