Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, September 15, 2008 Money in bank is safe if it's insured By Mike Benbow There's been some good news these days as gasoline and commodity prices have fallen, but there's also been some scary stuff. Among the biggest last week concerned Washington Mutual, which saw its shares lose most of their value, falling 87 percent from where they'd been in February. The Seattle-based Washington Mutual, the largest savings and loan in the nation, says it has enough money to keep things going until profits return. Still, even if you don't have savings or stock in WaMu, you're probably asking yourself: Is my money OK? The quick answer is yes, as long as you have it with an institution insured by the Federal Deposit Insurance Corp. and your deposits are within FDIC limits. FDIC Chairman Sheila Bair said that guarantee is ironclad, noting that insured depositors haven't lost a penny since the agency was created 75 years ago. For more of Bair's comments, and for helpful information on FDIC insurance, check the agency's most recent newsletter at www.fdic.gov/consumers/consumer/news/cnsum08/. Basically, the FDIC program protects deposit accounts -- checking, savings, certificates and money markets -- against losses. The basic protection is $100,000 per depositer, per bank, but that really depends on the types of accounts and their ownership. Joint accounts, for example, are protected up to $100,000 per owner. IRAs and some other retirement accounts are protected up to $250,000. Trust accounts can be protected up to $100,000 per beneficiary, meaning a parent who has a living trust that will go to three children after death could be insured up to $300,000. A married couple could have as much as $1.1 million fully insured at just one bank if they have things structured correctly. All this stuff can get pretty confusing, but the FDIC does have a calculator on its Web site that you can use to figure it all out. If you're interested, gather all your personal or business account information and go to www4.fdic.gov/EDIE/. The FDIC said it tries to pay off insured depositors quickly, shortly after the bank is closed. So what happens if your bank fails and you have deposits that are not insured? The FDIC is supposed to give you access to your stuff in safe deposit boxes right away. For regular deposits over the insured amount, you'll receive a claim that could take years to settle. Eventually you'll be paid based on how much the government collects from selling the bank's assets. In past bank failures, the average person has gotten 72 cents for each dollar deposited, according to the FDIC That amount could be zero, however, so it's important that you look at your deposits and make sure they're insured. If they aren't, you transfer them to an account that is. For more information on bank failures, check out the FDIC brochure called "When a Bank Fails" at www.fdic.gov/bank/individual/failed. Mike Benbow: 425-339-3459; benbow@heraldnet.com. READER COMMENTS Be the first to comment. You must be a registered user and verify your e-mail address to post comments to blogs or articles on HeraldNet. To register, click here. To read other terms and conditions, click here. Log out

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