Unlimited FDIC Coverage Expires
In 2010 the FDIC adopted an amendment to its deposit insurance regulations to implement section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which provides unlimited deposit insurance for “noninterest-bearing transaction accounts.” This final rule was effective December 31, 2010, and is set to expire on December 31, 2012, which is quickly approaching.
This coverage currently is only available for “noninterest-bearing transactions accounts,” which the FDIC defines as “a traditional checking account or demand deposit account on which the insured depository institution pays no interest.” It does not include interest bearing checking or demand deposit accounts, NOW accounts, money-market accounts, and Interest on Lawyers Trust Accounts (“IOLTAs”).
After the expiration of the rule on December 31, 2012, the amount of the FDIC coverage will revert to the $250,000 under the FDIC’s general deposit insurance rules.
For more information about the FDIC and their insurance coverage of transaction accounts, visit www.fdic.gov.
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