What Protection Does Your Money Have?

WHAT PROTECTION DOES MY MONEY HAVE?

Banks - Generally, bank deposit accounts at banks insured by the Federal Deposit Insurance Corporation (FDIC) are insured up to $100,000 per depositor per bank. It does not cover money market mutual funds, stocks, bonds, mutual funds, life insurance policies, annuities, or other securities, even if they were bought through an FDIC-insured bank. Deposits that represent different categories of ownership may be independently insured. For example, a joint account qualifies for up to $100,000 of coverage for each person named as a joint owner of the account. That coverage is in addition to the $100,000 maximum coverage for individual accounts for each person. For example, a married couple with three accounts at one bank--they each have $100,000 in an individual account, and they also have $200,000 in a joint account--would qualify for FDIC coverage of the entire $400,000. Your bank may have additional protection. In some states, a state-chartered savings bank must carry additional insurance to cover potential losses beyond the FDIC limits. An online calculator available at the FDIC's web site (www.fdic.gov/edie/) can help you estimate the total FDIC coverage on your deposit accounts.

Credit unions - Member share accounts at most credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF) and backed by the full faith and credit of the U.S. Treasury. (Some credit unions are not federally insured but are overseen by state regulators; they typically have private credit insurance.) NCUSIF insurance is similar to FDIC insurance. It covers single-owner accounts up to $100,000 per customer per institution. As with bank deposit accounts, independent coverage may be available for different categories of ownership. You can estimate your existing coverage by using the calculator at the NCUA's web site at http://webapps.ncua.gov/ins/.

Brokerage accounts - Most brokerage accounts are protected by the Securities Investor Protection Corp (SIPC). The SIPC is not a governmental agency but a nonprofit corporation funded by its membership, which is comprised of broker-dealers registered with the Securities and Exchange Commission. (Any broker-dealer that is not an SIPC member must disclose that fact to customers.) SIPC was created by Congress in 1970 to help return customer property, including both securities and cash in brokerage accounts, if a broker-dealer or clearing firm experiences insolvency, unauthorized trading or securities that are lost or missing from a customer's securities account. Many brokerages also carry additional private insurance to extend coverage beyond the SIPC limits. For individual accounts, SIPC covers a maximum of $500,000 per customer (including up to $100,000 in cash) at a given brokerage house or clearing firm. As with banks, total coverage can be higher for multiple accounts at one institution, depending on how they're held. For example, a married couple could have two individual accounts with $500,000 of coverage each, plus a joint account that would bring their aggregated coverage for that firm to $1.5 million. Each of your retirement accounts at a given firm also is generally eligible for an additional $500,000 of SIPC coverage (including up to $100,000 in cash) in the event securities in your account are lost or stolen. It's important to remember that SIPC does not protect against market risk or price fluctuations.

John Thomas - Certified Mortgage Planner - Primary Residential Mortgage, Inc.

www.DelawareMortgageLoans.net

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