FDIC Rules: How to Protect Your Deposits

With all the things going on in the economy now, you may be wondering if your bank deposits are safe.

The short answer for most people: "yes." You have the backing of the Federal government, through the FDIC, to guarantee accounts up to $100,000.

However, it's important not to just sit back and assume everything is covered. Depending on the amount of your deposits and the type of accounts you have, there are some important things you need to know. You may even be entitled to more coverage than $100,000, depending on how your accounts are held.

We've rounded up some resources abut FDIC insurance to inform you and bring peace of mind. Let's take a look:

- Walter Updegrave, Money Magazine senior editor explains what is and what isn't covered from bank failure in an article at CNN Money.com. "FDIC insurance applies only to bank deposits, which would include money in checking accounts, savings accounts, NOW accounts, money-market accounts and CDs. But this insurance does not cover investments that are not deposits, such as mutual funds, stocks, bonds or Treasury bills or annuities, even if you bought these investments at the bank."

- Suze Orman, Host "The Suze Orman Show," tells what you need to know about FDIC insurance in an article at CNBC. She goes through various scenarios combining different account limits and explains how to maximize coverage in some circumstances, beyond $100,000.

- Bankrate.com provides an overview of the rules for CDs when banks merge, how to protect retirement savings and what happens if you're not covered. The article has a nice checklist of the types of investment vehicles covered and not covered by FDIC.

- The Pittsburgh Post Gazette sheds some light on how the FDIC insures trust deposits. "The misunderstanding of how the FDIC covers trust deposits is a growing problem, in part because of the rapid growth of trusts as estate planning tools." If you have trust accounts, this is a must read.

- Ric Edelman provides a useful PDF document concerning the FDIC rules for insuring bank deposits which covers joints accounts, single accounts, IRAs and self-directed 401K plans, payable on death accounts and living trust accounts. He also explains the difference between FDIC and SIPC, which covers brokerage investment accounts.

- CNN suggests, "If your deposits exceed the insurance limits, spread your money around to a few different banks -- not different branches of the same bank but different banking institutions. Also, open accounts in the name of different family members, and make sure you ask your bank if your deposits are insured."

- At Lifehacker, Gina Trapani says it's time to batten down the hatches and shares how to prepare your savings and investments for a crisis. Bonus: she also gives advice for shoring up your career during tough times.

- On Pamela's Blog at Active Rain she explains what happens (and what to do) if your bank fails and you have a safety deposit box. "When an insured bank or thrift closes, the Federal Deposit Insurance Corporation (FDIC) usually arranges for another institution to take it over, including branches where you might have a safe deposit box. In those situations, you should be able to conduct business as usual. If the FDIC cannot find a buyer for your bank, it arranges for you to remove the contents of your safe deposit box so you can obtain a box at another institution, if you wish. This is done within a few days after the bank fails."

- Is there light at the end of the tunnel in the current credit crisis? Anderson Cooper, CNN news anchor writes at his blog, Anderson Cooper 360, that there is indeed a light at the end of the tunnel . . . but we may not see it until the year 2015. Yes, I said 2015. OK, but set aside your fear. He actually has a couple good tips for what to do to protect yourself, including checking out the FDIC calculator.

- And where small businesses are concerned, a bank failure can be a devastating blow says Stacey Cowley on CNNMoney.com. If you're fortunate enough to have a small business with six figure sums stashed away, Stacey suggests CDARS, a Certificate of Deposit Account Registry Service system designed to offer FDIC protection for amounts greater than the standard $100,000 limit.