FDIC Ups Deposit Insurance... Temporarily

As authorized by the Emergency Economic Stabilization Act of 2008 -- the bailout bill -- the Federal Deposit Insurance Corporation (FDIC) has increased the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor. However, the bailout bill stipulated that the increase will be effective only through December 31, 2009, when the coverage limit will return to $100,000.

"This temporary increase in deposit insurance coverage should go far to help consumers maintain confidence in the banking system and the marketplace," said FDIC Chairman Sheila C. Bair in a press release. Hopefully, that confidence will not be as temporary as the deposit insurance increase.

FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs). FDIC insurance does not, however, cover other financial products and services that insured banks may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities. [... more details of FDIC coverage]

There is no need for depositors to apply for FDIC insurance or even to request it. Coverage is automatic.

Also See:
Global Stock Markets Drop as Central Banks Scramble to Stop Panic (US Economy)
Bailout Passes - What Exactly Is In It? (US Economy)