The FDIC is tweaking its insurance rules to give savers a little extra protection in 2011.
It will provide unlimited deposit insurance coverage to noninterest-bearing transaction accounts.
This means that no matter how much you have in a traditional checking account, or demand deposits accounts that earn no interest, that money is insured should the bank go under.
And banks still are going under – 146 so far this year and counting.
That also means all deposits in non-interest bearing accounts will no longer be counted towards the insurance limit for interest-bearing accounts.
But this change is temporary, running from Dec. 31, 2010 through Dec. 31, 2011.
For many years the Federal Deposit Insurance Corp. covered the first $100,000 in all interest and non-interest earning accounts at each insured bank.
That limit was raised temporarily to $250,000 in October 2008, and made permanent as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act that Congress passed earlier this year.
As result of these changes, the first $250,000 in all interest bearing accounts will be fully insured next year.
If you’ve invested more than that at any one bank, it’s a good idea to move some of your savings to another FDIC-insured bank so that you’re fully protected if the worst happens.
Many banks are part of what’s called a Certificates of Deposit Account Registry Service.
That allows your bank to divvy up large deposits with other banks that are part of its CDARS network, to make sure you never exceed the FDIC limits at any one bank.
Ask about that service if you’re fortunate enough to need it.