Friday, May 22, 2009

FDIC extends temporary limit on deposit insurance of $250,000 through 2013

The temporary increase of the limit for FDIC deposit insurance to $250,000 was due to expire at the end of 2009, but has now been extended through 2013. As the FDIC announcement says:

On May 20, 2009, President Barack Obama signed the Helping Families Save Their Homes Act, which extends the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 per depositor through December 31, 2013. This extension of the temporary $250,000 coverage limit became effective immediately upon the President's signature. The legislation provides that the SMDIA will return to $100,000 on January 1, 2014.

I don't even want to imagine how you would pronounce "SMDIA", but the extension is welcome.

And don't ask me why they do not make the increase permanent or even raise it to $750,000 or $1 million or even $5 million or $10 million just to completely eliminate the concern for all but the very richest Americans who can afford to pay professionals to shuffle money around between banks. Maybe... maybe the CDARS guys objected. CDARS is "okay", but results in lower yields.

-- Jack Krupansky

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