Federal deposit insurance is limited to a total aggregate amount of $100,000 for each depositor in each bank or financial institution. So, to insure the safety of your funds, you should not purchase certificates of deposit (CDs) that would push your total deposits in any one bank or financial institution to more than $100,000.
If you plan to purchase your CDs through a deposit broker, it is very important that you know which bank or financial institution will be issuing your CDs. In other words, find out where the deposit broker plans to deposit your money. Also, be sure to ask what record-keeping procedures the deposit broker has in place to assure your CDs will have federal deposit insurance.
If you are setting up the CDs as part of your retirement accounts, be advised that the Federal Deposit Insurance Corporation (FDIC) Board of Directors increased the deposit insurance coverage on certain retirement accounts at a bank or savings institution to $250,000 from $100,000, effective April 1, 2007. The basic insurance coverage for other deposit accounts remains at $100,000.
For more information about federal deposit insurance, read the FDIC's publication "Your Insured Deposits" at http://www.fdic.gov/deposit/deposits/insured/index.html, or call the FDIC's Central Call Center at (877) 275-3342 or (877) ASK-FDIC. For the hearing impaired, call 1-800-925-4618 or 1-703-562-2289 (7:00 a.m. to 7:00 p.m. Eastern time).
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