Are your bank deposits insured?

If your account is under the $100,000 FDIC insurance limit, even headlines like the failure of IndyMac Bank, one of the largest bank failures in history, shouldn't make you lose any sleep. But if your deposits are above the $100,000-per-person insured limit, this latest bank failure should be a wake-up call.

America has $6.881 trillion dollars in deposit institutions, but only $4.241 trillion of those deposits are insured, according to the latest FDIC year-end statement. That leaves a staggering gap of more than $2.6 trillion sitting in uninsured bank accounts.

In the IndyMac takeover, it has been estimated that around $1 billion of deposits in the bank were uninsured, impacting 10,000 depositors.

Some of those depositors may have been lured to jumbo CDs because of above-market rates being offered by the struggling bank. That's a reminder of the old saying: "I'm not so concerned about the return on my money as I am about the return of my money!"

How FDIC Insurance Works

Now is the time to examine your bank accounts to make sure that you remain under the insurance limits, especially if you have multiple accounts in one bank. Here's how the insurance works, using excerpts from the FDIC Web site, where you can read the details.

Single Accounts: These are deposit accounts owned by one person and titled in that person's name only. All of your single accounts at the same insured bank are added together and the total is insured up to $100,000. For example, if you have a checking account and a CD at the same insured bank, and both accounts are in your name only, the two accounts are added together and the total is insured up to $100,000.

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