Bank Failures Prompt Customers to Adjust Their Accounts for FDIC Coverage

[marmar]

from Bloomberg:



Bank Failures Have Customers Wondering About FDIC Protection

By Jeff Plungis

Aug. 8 (Bloomberg) -- As U.S. regulators brace for more bank failures, consumers are wondering for the first time since the savings-and-loan crisis of the 1980s about the safety of their money.

Harry Newton, a former publisher who lives in New York City, moved $604,000 in cash to seven different banks last month after the seizure of IndyMac Bancorp Inc. to ensure that his funds were covered by the Federal Deposit Insurance Corp.

In all, eight banks have been closed in 2008 by state and national regulators amid record losses tied to the collapse of the subprime mortgage market, data compiled by the FDIC show.

``I'm worried about the banks that failed this year,'' said Newton, 66. ``Some of them weren't on the FDIC watch list. I believe there are billions of dollars of assets on balance sheets that haven't been written down yet.''

FDIC insurance covers deposits up to $100,000 per person. Joint accounts are covered up to $200,000. Individual Retirement Accounts, if they're invested in bank products, not stocks and bonds, are insured up to $250,000.

There are steps you can take to have even more money covered. Naming immediate family members as payable-on-death beneficiaries may raise insurance limits to as much as $800,000 according to the FDIC. With so-called brokered certificates of deposit, as much as $50 million may be protected. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601213&sid=a9l98FeLxSW8&refer=home