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Old 07-22-2010, 09:52 PM
 
Location: Bellingham, WA
464 posts, read 1,039,120 times
Reputation: 1057

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First post in this forum...

I have over $250K in savings accounts with two credit unions - one down in Texas, and the other here in Washington State.

To simplify my banking, and to take advantage of my local credit union's better savings account interest rate, I'm thinking of closing my Texas account and moving that money to my local credit union. In doing so, I'll be over the $250K NCUA insurable limit.

I know there are better places for my money, but I prefer to have it accesible, and safe, for the time being, as I may need some of it for a down payment on a house.

So...just how risky is it to exceed the insurable limit? We've had a bank or two close here, but it seemed to have been a rather predictable and publicized process. Am I mistaken to think my bank, or credit union, could suddenly go belly-up and I'd take a loss?

The interest on my money if it were all up here would pay a couple months of rent a year, and I'd like to do that if it's safe.

TIA.
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Old 07-22-2010, 09:57 PM
 
13,811 posts, read 27,302,854 times
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Keep in mind even the $250k limit was only temp. It will soon go back to $100k.
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Old 07-22-2010, 10:03 PM
 
2,714 posts, read 4,263,688 times
Reputation: 1314
Quote:
Originally Posted by CoastieTX View Post
First post in this forum...

I have over $250K in savings accounts with two credit unions - one down in Texas, and the other here in Washington State.

To simplify my banking, and to take advantage of my local credit union's better savings account interest rate, I'm thinking of closing my Texas account and moving that money to my local credit union. In doing so, I'll be over the $250K NCUA insurable limit.

I know there are better places for my money, but I prefer to have it accesible, and safe, for the time being, as I may need some of it for a down payment on a house.

So...just how risky is it to exceed the insurable limit? We've had a bank or two close here, but it seemed to have been a rather predictable and publicized process. Am I mistaken to think my bank, or credit union, could suddenly go belly-up and I'd take a loss?

The interest on my money if it were all up here would pay a couple months of rent a year, and I'd like to do that if it's safe.

TIA.
If you want it safe, why would you want to exceed the FDIC limit of $250,000 for insured deposits?

When do you need this money? 6 months? 1 year? 2 years? Once you figure that out I would put this money in a high interest CD for the time frame you have decided on.

Another option is a money market account... or high interest savings account (with a reputable institution that is insured by the FDIC of course)

But if I were you, I'd really go with a CD (with a bank insured by the FDIC)
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Old 07-22-2010, 10:08 PM
 
2,714 posts, read 4,263,688 times
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Quote:
Originally Posted by wheelsup View Post
Keep in mind even the $250k limit was only temp. It will soon go back to $100k.
Not anymore! As of today, it's permanent!

"[SIZE=2]On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The standard maximum insurance amount of $100,000 had been temporarily raised to $250,000 until December 31, 2013. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.[/SIZE][SIZE=2] [SIZE=2][/SIZE][SIZE=2]The temporary increase from $100,000 to $250,000 was effective from October 3, 2008, through December 31, 2010. On May 20, 2009, the temporary increase was extended through December 31, 2013.[/SIZE]
[SIZE=2][/SIZE][SIZE=2]"With this permanent increase of deposit insurance coverage to $250,000, depositors with CDs above $100,000 but below $250,000 will no longer have to worry about losing coverage on those CDs maturing beyond 2013. We strongly encourage all bank depositors who have questions about their insurance coverage to go to our Web site at www.fdic.gov and use our Electronic Deposit Insurance Estimator (EDIE) or call our toll-free number at 1-877-ASK-FDIC. Insured deposits provide the comfort and peace of mind to depositors that their money is 100 percent safe – provided they keep their deposit balances within the insurance limits," said FDIC Chairman Sheila C. Bair."[/SIZE]


[SIZE=2]FDIC: Press Releases - PR-161-2010 7/21/2010
[/SIZE]

[/SIZE]
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Old 07-22-2010, 10:28 PM
 
3,459 posts, read 5,756,174 times
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The $250K is per account, so you could have $250K in a savings account, and another $250K in a money market account, and be insured for $500K.
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Old 07-22-2010, 10:33 PM
 
Location: Long Island
9,918 posts, read 23,024,907 times
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Default Something to keep in mind...

Just as an FYI - in this economic climate, where nothing is certain - I suggest you keep the total amount BELOW the maximum of $250K. Why, you might ask: if the interest accrued brings the amount OVER the maximum, that portion is at risk because it's not covered... In the meantime, you're still paying income tax on it though!
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Old 07-22-2010, 11:01 PM
 
680 posts, read 1,912,600 times
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Quote:
Originally Posted by sterlinggirl View Post
The $250K is per account, so you could have $250K in a savings account, and another $250K in a money market account, and be insured for $500K.
While it is true that it is possible to be FDIC insured for more than $250K at a single bank, the example above may NOT be fully insured. It is not just based on the type of account (ie. Savings/Checking/MMA/CD), but also the OWNERSHIP type of the account.

For example.... If I am married, I can have $250K in a Singly Owned Account, and I can have $250K in a Joint Account with my wife and be covered up to $375K ($250K of my own account plus $125K - which is half of the joint account).

If I am single and have a number of Singly Owned Checking Accounts, Savings Accounts, MMA, etc.... I am only protected up to $250K of the total of those accounts at that one bank.

There are a few exceptions and account types (like IRAs) that are treated differently.

Please take a look at the FDIC's site for more info:
FDIC: Your Insured Deposits
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Old 07-22-2010, 11:04 PM
 
692 posts, read 3,132,712 times
Reputation: 357
Quote:
Originally Posted by sterlinggirl View Post
The $250K is per account, so you could have $250K in a savings account, and another $250K in a money market account, and be insured for $500K.
I think you are wrong on that.

My understanding is only 1 FDIC insured acct. per individual per institution. If you are married you could have your spouce open an acct.
To be sure just contact the Credit Union and ask them.

I would NOT go over the limit in these dangerous times ... Period !!!

What is the rate you are getting ?? What is your time frame ??

I might be able to give you an alternative in Western Washington that I use.

SF
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Old 07-23-2010, 12:25 AM
 
Location: Long Branch
390 posts, read 1,506,191 times
Reputation: 110
I would separate into 2 institutions. For the second one find a local bank or other CU that gives you added benefits for being a "preferred" customer.
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Old 07-23-2010, 12:32 AM
 
Location: Long Island
9,918 posts, read 23,024,907 times
Reputation: 5871
Quote:
Originally Posted by volk2k View Post
While it is true that it is possible to be FDIC insured for more than $250K at a single bank, the example above may NOT be fully insured. It is not just based on the type of account (ie. Savings/Checking/MMA/CD), but also the OWNERSHIP type of the account.

For example.... If I am married, I can have $250K in a Singly Owned Account, and I can have $250K in a Joint Account with my wife and be covered up to $375K ($250K of my own account plus $125K - which is half of the joint account).

If I am single and have a number of Singly Owned Checking Accounts, Savings Accounts, MMA, etc.... I am only protected up to $250K of the total of those accounts at that one bank.

There are a few exceptions and account types (like IRAs) that are treated differently.

Please take a look at the FDIC's site for more info:
FDIC: Your Insured Deposits

Absolutely correct
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