900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 · 215.563.0276 · Fax: 856.667.3652

The Online Advisor

August 2008

Smart Business

Are your bank accounts insured?


How safe are your bank accounts? You probably rely on FDIC (Federal Deposit Insurance Corporation) insurance to protect your money if your bank fails. But this might be a good time to check your FDIC coverage for several reasons.

First, you might have less insurance coverage than you think. If your savings and loan or bank is an FDIC member, you've probably noticed the FDIC logo that says "each depositor insured to $100,000." A common misconception is that every account is insured up to $100,000. Unfortunately, it's not that simple. For example, a $100,000 insurance limit applies to the combined total of all accounts that are in your name alone. If you have $10,000 in checking, $20,000 in passbook savings, and $90,000 in bank CDs, FDIC insurance covers only $100,000 of your total $120,000. Similar limits apply to your share of all joint accounts. Your combined IRA accounts are subject to other limits.

A second reason to be cautious is that not all products you buy at the bank branch are FDIC insured. Many banks sell investment products, such as annuities and mutual funds. FDIC protection only applies to traditional deposit accounts, such as checking, savings, certificates of deposit, and money market deposit accounts. In addition, your bank must be an FDIC member in order for you to have FDIC protection.

Finally, although the banking industry is generally safe and bank failures are rare, they do happen. The FDIC was created in 1933 to insure deposits and to promote sound banking practices.

By knowing and following the FDIC insurance rules, you can avoid unnecessary exposure to risk. It could be well worth your time to sit down with a bank representative and review the FDIC insurance coverage on each of your bank accounts.






For details on exactly what business records you need and how long they should be kept, call us.

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