For maximum insurance, it’s better not to deposity everything in one account. It’s very rare to hear about a bank failing and most depositors don’t make enough to to even go over the insurance protection limit incase their bank fails.
Most peopel are not aware of how much of their money is protected when they deposit significant amount of money in an institution that is insured by the Federal Deposit Insurance Corp. One of the main reasons why there has been soo much interest in deposit insurance is due to increase in retirement savings account. For the first time in 25 years, limit was increased from $100,000 to $250,000.
According to FDIC, basic insurance limit for bank deposits, credit union and thrifts is still $100,000. Single accounts are insured up to $100,000 per person per insured bank. Furthermore, husband and wife can have single accounts totaling up to $100,000 in same bank and still be fully insured. On the other hand, Joint accounts that are owned by two or more at same bank are insured up to $200,000. Joint accounts are insured up to $100,000 per co-owner. So a husband and wife can have up to $400,000 in FDIC insurance by having a joint account ($200,000), single account for wife ($100,000) and single account for husband ($100,000).
Finally, opening account in different banks will allow one to get more insurance. FDIC insures deposits on “per bank” basis and depositing money in FDIC insured bank will allow one to have more insurance. For example, if you deposit $250,000 in IRAs under your name at 10 different bank, your insurance coverage will be $2.5 million. It’s important to open these accounts at separately chartered banks. This will prevent the single institution from adding together the deposits and insure only up to $250,000. For traditional IRA, a Roth IRA and a self directed Keogh account at the same bank, all accounts will be joined and this will only provide insurance up to $250,000.
For more information, please visit http://www.fdic.gov