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FDIC $250,000 Insurance Limit May Become Permanent

You may have read some recent news reports about how the financial reform bill (which the Senate passed last week) has become bloated with unnecessary and irrelevant amendments. Fortunately there are a few necessary and relevant amendments, such free credit scores for those rejected for credit. Another amendment included in the bill has to do with FDIC insurance. In the midst of the economic crisis, the FDIC insurance on deposit accounts was raised from $100,000 to $250,000. That increase in coverage was set to expire on at the end of 2013, January 1st, 2014 to be specific (it was extended once already through the Helping Families Save Their Homes Act from its original expiration date).

An amendment would make this higher limit permanent. FDIC insurance is funded through fees collected from banks and this amendment is almost universally supported, by the banking industry and consumer advocate groups alike.

For those unfamiliar with how FDIC insurance works [3], your money at an FDIC insured bank is protected up to $250,000 in the event of a bank failure. There are other ownership structures you can use to raise the cap (i.e. joint accounts are protected up to $500,000) but to date no depositor has ever lost a penny of FDIC insured money.

Credit card interest rates, ATM fees among proposals tied to financial overhaul [4] [Associated Press]