Wednesday, July 16, 2008

FDIC Limits

My friend came by in a panic yesterday because she'd just learned about FDIC limits and has over 100k sitting in a Money Market at Wachovia. I wish I had those types of money worries ;)

A few phone calls to Wachovia later ( was convuluted) we sorted it out.

1. 100k is the sum of all accounts, not per account
If I have 90k in cds and 15k in a money market, FDIC insurance only covers 100k. If Wachovia bellies up the other 5k would vanish.

2. 100k limit is per PERSON
Each person on the accounts is insured up to 100k. As an example between roths, cds, checking, etc I have five accounts at Wachovia. My parents are both on one of the accounts so they are all insured up to 300k collectively.

3. A "Payable on Death" adds another 100k of security
When I die, assuming my brother is still alive and we have not had an epic fallout, he can walk into Wachovia and clear out my accounts to buy collectibles and dust catchers. My brother doesn't bank with Wachovia but because he is my POD (like the banking terms?) I have an extra 100k of FDIC protection. He doesn't have access to my accounts while I'm breathing and doesn't even need to be aware of being my POD. By adding him (which is just practical) my accounts are now insured up to 400k.

My friend is married so her joint account is insured up to 200k. She is going to add a POD to get the 300k benefit. I also gave her an over-abundance of information on CDs, way2save, bankrate and the wonderful world of java interest calculators.

If I were more mathematically oriented I would love to be a financial specialist. Since I'm not I'll settle for boring my friends and running a blog :)