A single account is a deposit owned by one person. The following deposit account types are included in this ownership category: Accounts held in one person’s name alone

Accounts established for one person by an agent, nominee, guardian, custodian, or conservator, including Uniform Transfers to Minors Act accounts, escrow accounts, and brokered deposit accounts

Accounts held in the name of a business that is a sole proprietorship (for example, a “DBA account”)

Accounts established for a decedent’s estate, and

Any account that fails to qualify for coverage under another ownership category.

All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $100,000.

Certain Retirement Accounts

These are deposits owned by one person and titled in the name of that person’s retirement account.

The following types of retirement plan deposits qualify for coverage as “certain retirement accounts”:

All types of IRAs, including:
Traditional IRAs
Roth IRAs
Simplified Employee Pension (SEP) IRAs
Savings Incentive Match Plans for Employees (SIMPLE) IRAs

All Section 457 deferred compensation plan accounts, such as eligible deferred compensation plans provided by state and local governments regardless of whether they are self-directed

Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE held in the form of 401(k) plans, self-directed defined contribution money purchase plans, and self-directed defined contribution profit-sharing plans

Self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals
All retirement accounts listed above owned by the same person in the same FDIC-insured bank are added together and the total is insured up to $250,000.

Joint Accounts

A joint account is a deposit owned by two or more people. To qualify for insurance under this ownership category, all of the following requirements must be met:

All co-owners must be people. Legal entities such as corporations, trusts, estates, or partnerships are not eligible for joint account coverage.

All co-owners must have equal rights to withdraw deposits from the account. For example, if one co-owner can withdraw deposits on his or her signature alone but the other co-owner can withdraw deposits only with the signature of both co-owners, the co-owners do not have equal withdrawal rights.

All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservator.

If all of these requirements are met, each co-owner’s share of every account that is jointly held at the same insured bank is added together with the co-owner’s other shares, and the total is insured up to $100,000.

The FDIC assumes that all co-owners’ shares are equal unless the deposit account records state otherwise.

For example, a husband and wife could have up to $200,000 in one or more joint accounts at the same insured bank and the deposits would be fully insured. The husband’s ownership share is insured up to $100,000 and the wife’s ownership share is insured up to $100,000.

To be continued…

http://www.fdic.gov/index.html

Washington Mutual, which was bought by JP Morgan after being grabbed by the US authorities late yesterday, was a major player in the controversial “option ARM” mortgages which allow borrowers different options in setting the level of their own repayments. The failure of Washington Mutual broke confidence in a large group of well known bank today, as investors tried to figure out the implications of the largest collapse of a major bank on record.

ARM mortgages, which were popular at the height of the housing boom, have proven to be gigantic liabilities for banks.Other firms known to hold them saw their stock prices fall greatly today.

Wachovia, a national chain with 3,000 branches and assets of $812bn, saw its shares nose dive by 21% during early trading in New York.

Details are emerging about the run on the assets of Washington Mutual, known as WAMU, in the days leading up to its seizure. The Office of Thrift Supervision said customers withdrew $16.7bn of deposits in 10 days, beginning on September 15 – the day Lehman Brothers declared itself bankrupt, sparking a crisis of confidence in the larger banking system.

This brings us to our question – what exactly does the FDIC cover and why did so many people scamble to get their money out of WAMU?

FDIC insurance covers all types of deposits received at an insured bank, including deposits in checking, NOW, and savings accounts, money market deposit accounts, and time deposits such as certificates of deposit (CDs).

FDIC deposit insurance covers the balance of each depositor’s account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank’s closing.

The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these investments were bought from an insured bank.

The FDIC does not insure U.S. Treasury bills, bonds, or notes. These are backed by the full faith and credit of the United States government.

How much insurance coverage does the FDIC provide?
The basic insurance amount is $100,000 per depositor, per insured bank.

The $100,000 amount applies to all depositors of an insured bank except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.

Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank.

Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured.

The following sections describe the eight ownership categories recognized by FDIC regulations and the requirements that must be met to have coverage beyond the basic $100,000 insurance amount.

Tomorrow we will begin to identify the eight ownership categories with facts about each.

http://http://www.fdic.gov/index.html

Acquisition of Washington Mutual Bank

September 25, 2008

Banking operations of Washington Mutual, Inc were sold in a transaction facilitated by the Office of Thrift Supervision (OTS) and the FDIC. All deposit accounts and all loans have been transferred to JPMorgan Chase Bank.  

•  JP Morgan Acquires All Qualified Financial Contracts as Part of Washington Mutual Acquisition
• Washington Mutual Bank Investors – Additional Information
• Continuation of Contracts Transferred From Washington Mutual Bank

I am going to start a series of articles to give some insight into what is going on in our economy.  I am not giving financial advice but just my opinion based on certain facts.  Stay tuned!