The subprime mortgage hit banks around the nation. Their stocks has plummeted last year, and nobody knows when it will stop. Business are currently very bad for them. It’s not a surprice to see loss from them. Analysts are predicting that up to 300 banks could fail. Many people now wondering if their money is safe in the bank.

During the crisis Federal Deposit Insurance Corporation (FDIC) made some changes about the deposit insurance coverage. FDIC is a federal government run entity that provides deposit insurance protection for participating member banks. The FDIC system was set up to bring consumer confidence in US banking system during financial turmoil.

Deposits at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts-except for certain retirement accounts-will return to at least $100,000 per depositor. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, was increased permanently to $250,000 per depositor in 2006.

The FDIC protection covers a variety of bank deposits: checking accounts, savings accounts, money market accounts, certificate of deposits (CD’s). However, does not cover non bank deposit type accounts and assets like - stocks, bonds, and mutual fund investments.

So if you have more than $250,000 what will you do?

• First, you sould look into quality banks to make sure it’s not likely to fail. You should be reading the bank’s financial report. If they have huge loss and high ratio of non-performing loan, this is a sign of danger. Many banks which provides mortgage are in bad condition. So do your homework. You can get a lot of information at FIDC website.
• A safe place to invest your uninsured excess cash is in Treasury bills. The Treasury bill is backed by the U.S. government, so it will unlikely to fail.
• Another way is to spread your $250,000 across several banks. But this will create a lot of work in your life.

Ian
Invest Money. Learn how to earn, preserve, and spend money.