While this is timely information bank failures are normal part of life.

Mutant — Mon, 14 Jul 2008 06:58:14 -0800

Worried about bank failures? First step: check if your bank is insured by the Federal Deposit Insurance Corporation (FDIC). If so, then your first $100K is insured against loss so no worries.

Got more than $100K? Well then, you'd better speak with EDIE. EDIE (the Electronic Deposit Insurance Estimator) will tell you exactly how much FDIC insurance coverage you've got. The maximum coverage is $100K per depositor per savings account per institution. So one approach would be to distribute one's money at multiple financial institutions. But by enlisting the entire family, the apparent FDIC limits for deposits at a single institution can be circumvented. Assuming we're talking about a married couple with two children, here's how it works. Husband and wife each maintain separate savings accounts, gaining FDIC coverage on an aggregate amount greater than $100K but less than $200K. The children can help out here as well; by opening accounts in their name, and using either a living trust or what is called a Payable On Death account another $100K per child will gain FDIC protection. And IRAs, are insured to a max of $250K per account holder, regardless of other funds on deposit. Using this approach, a family of four can gain FDIC coverage totaling almost one million dollars of deposits at a single institution. What ever you do, don't make these mistakes. Troubled by trusts? Confused by all these accounts? Well, the simplest approach would be to deposit your money into one of the 73 Massachusetts based banks which is a member of both the FDIC and The Depositors Insurance Fund (DIF). After FDIC coverage has been exceeded, this private insurance covers any shortfalls. The last time we saw a large number of bank failures, the DIF covered uninsured losses of some 6,500 depositors at 19 failed member financial institutions. Since it's inception "no depositor has ever lost a penny in a bank insured by both the FDIC and the DIF".

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While this is timely information bank failures are normal part of life.