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Banking

Depositors Get a Permanent Raise

Higher FDIC insurance limits on accounts were made permanent.

Tucked among the pages of the massive financial-reform act was good news for depositors: a permanent extension of the Federal Deposit Insurance Corp. insurance limit to $250,000. Congress had temporarily raised the limit in October 2008 from $100,000 to $250,000, but the higher limit was scheduled to expire at the end of 2013.

So if you have checking and savings accounts at the same institution, you are covered as long as the total of your balances does not exceed $250,000. The same is true for all your retirement accounts. The balances -- whether they are traditional IRAs, Roth IRAs, SEP IRAs, Keogh accounts or solo 401(k)s -- are totaled and the first $250,000 is protected. Anything above that amount is not insured; naming various beneficiaries does not increase the amount of insurance.

But you can deposit more than $250,000 in a single bank and have it insured if you title the accounts properly. For example, a couple with two children could open two individual savings accounts, a joint account (which would be protected up to $500,000), a retirement account for each of them, plus a trust account for each child in the name of each parent (four accounts). Those nine accounts would then be insured by the FDIC for up to $2.5 million.

To check whether your money is fully insured, go to www.myfdicinsurance.gov and use the Electronic Deposit Insurance Estimator (EDIE), the FDIC's virtual tutor. Just enter your accounts and their balances and EDIE will do the calculation for you. Or call the FDIC's hotline at 877-275-3342 (Monday through Friday, 8 a.m. to 8 p.m. eastern time) and talk to a representative.