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DW and I have over 100K in cash that we need to preserve. If FDIC insurance only covers up to 100K, what possibilities do we have?

--Deposit the money in two different banks?
--Will a joint account mean that we are really insured for 200,000? (Does it matter whose name comes first? For example, DW has suggested that it might work to have two joint accounts at the same bank, but one lists her name first and one lists my name first.)
--Other possibilities?

Thanks.

--SirTas
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DW and I have over 100K in cash that we need to preserve. If FDIC insurance only covers up to 100K, what possibilities do we have?

Go to www.bankrate.com to find the best rates when you decide what to do.

I believe the two of you can have up to $200,000 in a joint account and be covered, but wait for others to confirm this before taking my word on it.
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You can set it up so that you each have $100k in coverage at a bank, so unless you're over $200k, you're good to go. Here is a link to another thread that discusses this: http://boards.fool.com/Message.asp?mid=24824272&sort=whole#24831539

AJ
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You can get 6.25% APY on a Money Market Certificate at Pen Fed:

https://www.penfed.org/index.asp
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--Deposit the money in two different banks?

That would work.


--Will a joint account mean that we are really insured for 200,000?

As I understand it, yes.


--Other possibilities?

In fact, you can insure up to $400K at one bank, if you have 2 people. One account for person A ($100K), another for person B ($100K), and a last for them jointly ($200K).

After that, you can get another $400K at another bank, etc.

Do keep in mind that (given you are concerned about FDIC insurance), it would not be wise to deposit the full $100K to each account, because then any interest you receive is over the limit and uninsured.


Finally, should you not believe me, or just wanna check it out for yourself, play around with this:

http://www2.fdic.gov/edie/
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Place the money in a money market mutual fund...very low risk and most brokerage's insure up to one million.

JTS
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Also note that the EDIE at the FDIC is not accurate for credit unions.
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Place the money in a money market mutual fund...very low risk and most brokerage's insure up to one million.

That's not how I understand things to be.

If you carefully read your brokerage agreement, the brokerage's insurance only covers assets that would have been covered by SIPC but was denied due to having too high of an account balance -- in other words, a total failure of the brokerage with their debts exceeding their assets. Regular fraud, or the fund losing money, is specifically not covered by either.

Most brokerages' in-house money market mutual funds pay pitiful interest unless you have huge asset balances. $200k is not huge enough.

And you can't get around this by buying a money market fund directly from a major fund house, because you have no insurance in that case.

If a mutual fund has a default, the only thing you have going for you is hope that the fund's advising company will bail you out.
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Also note that the EDIE at the FDIC is not accurate for credit unions.

In what ways does it differ?

Here's an NCUA pdf file that details their insurance coverage limits:
http://www.ncua.gov/ShareInsurance/SpecialBulletin.pdf

In particular, the second page shows coverage limits that look exactly the same to me as those of FDIC insurance.

If there are differences (and I don't doubt you, but I don't know what they are), I think the main things most people are interested in are the same.

Ken (who forgot that retirement accounts are now covered up to $250k)
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Thanks. I found this
http://webapps.ncua.gov/ins/

which is the equivalent of EDIE for credit unions. But you're right, the rules seem to be the same.
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If you're really worried about insurance coverage risk on your account, you should split it up into at least two banks. My reasoning is that the insurance is meaningless to you in the short-term if the bank should fail. Access to the funds could be delayed for months. It's less risky to place your funds in two or more banks, since it's unlikely they will all fail at the same time. This way you maintain access to some of your funds until the failed bank is re-organized or closed out. Should the situation become a nation-wide bank failure, you'll likely have a chance to withdrawal some funds from one of the other banks.

Calvin
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If you're really worried about insurance coverage risk on your account, you should split it up into at least two banks.

FDIC says:
Historically, insured funds are available to depositors within just a few days after the closing of an insured bank. Since the start of the FDIC in 1933, no depositor has ever lost a penny of insured deposits.
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It's less risky to place your funds in two or more banks, since it's unlikely they will all fail at the same time. This way you maintain access to some of your funds until the failed bank is re-organized or closed out. Should the situation become a nation-wide bank failure, you'll likely have a chance to withdrawal some funds from one of the other banks.

Good thinking, Calvin, let's hope it doesn't come to that.
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FDIC says:
Historically, insured funds are available to depositors within just a few days after the closing of an insured bank. Since the start of the FDIC in 1933, no depositor has ever lost a penny of insured deposits.


I recall with the Savings & Loans defaults years ago, that some people waited at least a month. Maybe on average they can get you the money in a few days, but if timing is bad, you can have several late payments. I'd still opt for two banks over just one.

Calvin
- who actually has deposits at three banks
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