FDIC-Insured Deposits for Retirement:  Now Guaranteed up to $250,000.

For the first time in more than 25 years, Congress has raised the limit on the federal deposit insurance coverage that protects your retirement savings.  The new law provides up to $250,000 of deposit insurance for retirement accounts - the combined total of the traditional and Roth IRAs (Individual Retirement Accounts), self-directed Keoghs and certain other retirement accounts an individual may have on deposit at an FDIC-insured bank or savings institution, up from $100,000 previously.  In general, self-directed means the consumer chooses how and where the money is deposited. 

Note:  FDIC insurance coverage for self-directed retirement accounts applies primarily to certificates of deposits or "CDs", which are deposit accounts typically held for anywhere from one month to five years.  These accounts also are insured to $250,000 separately from any other deposits you may have at the same institution.  The higher coverage takes effect on April 1, 2006. 

The basic insurance coverage for other deposit accounts remains at $100,000 per depositor.  However, as before, there are ways to qualify for more than the basic coverage.  That's because different categories of accounts are each separately insured to at least $100,000 per depositor.

The FDIC does NOT insure investments that are not bank deposits - for example, mutual funds, stocks, bonds, life insurance policies and annuities - even if you purchased them from an FDIC-insured institution.

The FDIC can help answer your questions.  Go to www.fdic.gov to find publications as well as the Electronic Deposit Insurance Estimator (EDIE), a tool allowing you to get a summary of your FDIC coverage.  Or call toll-free 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday, 8am - 8pm EST.  For the hearing-impaired, the number is 1-800-925-4618.