TOP DRAWER ARTICLE

Increased Deposit Insurance
for Retirement Accounts
by
HL Carpenter

Got CD’s in your IRA? If so, consider holding those certificates of deposit at a Federal Deposit Insurance Corporation (FDIC) insured bank or savings institution.

You probably already know the FDIC is backed by the US Government and that deposits are protected (up to $100,000 per depositor) if the insured bank or savings institution fails.

That’s a good thing – but here’s something even better.

On April 1, 2006 FDIC insurance coverage limits on certain self directed retirement accounts on deposit at your bank or savings institution were raised to $250,000. This coverage is separate from your other deposits.

Funds in retirement accounts deposited at an FDIC insured bank for which you have the right to direct how the money is invested are covered. These include deposits in traditional and Roth Individual Retirement Accounts (IRAs), Simplified Employee Pension accounts, "Section 457" deferred compensation plan accounts, self-directed Keogh plan accounts, and self-directed defined contribution plan accounts.

Investments not covered are stocks and bonds, mutual funds, annuities, life insurance policies, and treasury bills, notes and bonds.

Originally published July 2006.

Last update: January 8, 2011