FDIC cancels unlimited insurance on accounts

Historic City News has learned that depositors previously granted unlimited deposit insurance coverage by the Federal Deposit Insurance Corporation if their funds were held in non-interest-bearing accounts, are losing that protection as of January 1, 2013.

FDIC, the banking industry’s equivalent of NCUA at credit unions, or SIPC for securities dealers, insures that depositors cannot lose the principle balances held at insured financial institutions up to the maximum amount allowed by law should the bank be closed, sold, or transfer ownership of its accounts — currently $250,000 per depositor on interest-bearing accounts.

Some institutions also offer additional, privately-placed insurance policies for large cash depositors in some cases.

Beginning January 1, 2013, all of a depositor’s accounts at an insured depository institution, including all non-interest-bearing transaction accounts and lawyer trust accounts, will be insured by the FDIC up to the standard maximum deposit insurance amount ($250,000), for each deposit insurance ownership category.

For more information about FDIC insurance coverage of noninterest-bearing transaction accounts, visit www.fdic.gov/deposit/deposits/unlimited/expiration.html