Until very recently, few people gave much thought to the insurance of bank deposits provided by the Federal Deposit Insurance Corporation. And, it’s likely that few of us will ever have to be involved with recovering deposits from failed banks. Still… it’s a good idea to know some of the basics of FDIC coverage.

If you went into a bank in September, you saw a notice that deposits were insured up to $100,000. Based upon recent legislation, the insurance amount has been increased to $250,000, through December 31, 2009. And news reports this evening (Sunday, October 12, 2008) suggest the possibility that bank deposits might be insured without limit, again at least for a while. Wait and see.

The basic coverage is subject to expansion, providing additonal protection. One basic expansion is that the $100,000 (temporarily $250,000) limit is for each bank in which you hold accounts. Of course, the way banks are merging, there might be only one bank left soon. But, until then, having accounts at different banks is a way to get increased coverage.

You can get additional coverage by titling accounts differently. Amounts held in joint accounts, custodial accounts for minors, certain revocable accounts, irrevocable accounts and most retirement plan accounts have limits that can increase substantially the level of protection afforded by FDIC coverage. The FDIC has, on its very helpful website, a calculator you can use to determine the level of coverage for various types of accounts. Go to www.fdic.gov/edie to meet EDIE the Estimator, who can help you to determine your coverage. Or you can call the FDIC at 1-877-275-3342, although you probably won’t be the only one calling them.