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Marino on Money: July 16

READ MORE: Marino on Money: July 16
This week we have been talking about FDIC insurance. In 2008, the limit was increased from $100k to $250k. That applies to each account holder at each institution. A person could have an individual and joint account covered at the same bank. Remember, a different branch of the same bank doesn't count. In 2010, the limit is lowered back to $100k, but retirement accounts, such as IRAs, will remain covered up to $250k. CDs, checking, and savings accounts are covered. Investments are not. Make sure you understand what is and is not covered by FDIC insurance. If you are unsure, just call your bank and they will be happy to explain. When a bank fails, insured deposits are completely covered. Federal law requires the FDIC to pay the deposit insurance "as soon as possible." According to, in most cases the insured funds are available the next business day after the bank is closed. As we have seen this year, another bank assumes the deposits. This sometimes happens over the weekend. There are certain accounts that may take longer than a day. But for the most part, it is business as usual when the new bank takes over. There should be no immediate changes to your account numbers, and your checks will good. Assuming, of course, your checks were good before the bank failed. Nobody likes to see a bank fail, but we have seen quite a few in 2009. Fortunately, not one bank customer has lost one dollar on deposit due to a bank failure. There may have been some inconveniences for the customers, but their money is still their money.

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FDIC insurance

The Emergency Economic Stabilization Act of 2008 temporarily increased deposit insurance to $250,000 from October 3, 2008, through December 31, 2009; but it has now been extended to December 31, 2013. Also, due to the large number of failed banks in recent weeks, there's an important issue regarding FDIC insurance depositors need to be aware of. While it is true an FDIC-insured depositor has never lost money on a claimed qualified account, there is a very important caveat: If an insured depositor fails to make a claim an insured or transferred deposit within 18 months after the FDIC initiates the payment of insured deposits, the transferee institution must refund the deposit to the FDIC, and all rights of the depositor against the transferee institution are barred. The FDIC then remits the insured deposit to the custody of the unclaimed property administrator in the account owner's home state, unless that state declines to accept custody. Upon delivery, the FDIC is deemed to have made payment to the depositor, and all rights of the depositor against the FDIC are barred. Most states allow claims in perpetuity, but there's a reversion clause. If a depositor does not claim the deposit delivered to the custody of the State within 10 years of the date of delivery, the deposit must then immediately be refunded to FDIC, and all rights of the depositor against the state and the FDIC are barred. It's important to note that If a state declines to accept custody of the deposit - which they sometimes do - the depositor must claim the funds from the FDIC before the receivership is terminated, or all rights of the depositor with respect to the deposit are barred. Dividends for credits arising from uninsured portions of a deposit may, however, be claimed after the receivership is terminated if a dividend check was returned by the post office for a bad address. Depositors should also be aware that due to the large number of mergers and acquisitions in the banking industry over the years, it is possible they or a deceased family member might well have an account at a failed bank and not know it. Finally, unclaimed safe deposit boxes at closed branches may be drilled and the contents sold at auction just weeks after closing, so prompt action is advised. Details on individual failed banks and respective claims procedures are available at: