Last Updated: December 12, 2008

Talk about peace of mind. Amid bank mergers and bank failures, the Federal Deposit Insurance Corporation (FDIC) increased its insurance coverage from $100,000 to $250,000 per account holder, per insured institution in October.

The FDIC has published a report explaining all the new changes along with tips and information to help bank customers better understand their insurance coverage and how to be sure all their deposits are fully protected. Key points made in the new publication are:

• The basic limit on federal deposit insurance coverage has been temporarily increased from at least $100,000 to at least $250,000 per depositor. A depositor may qualify for more than the basic insurance coverage at one insured bank because the FDIC provides separate insurance coverage for deposits held in different "ownership categories," such as single and joint accounts.
• By law, the basic FDIC insurance limit will return to $100,000 on January 1, 2010. That means all the deposits a consumer has at a bank in his or her name alone will be fully insured up to $250,000 through December 31, 2009. After that date, the depositor will only be insured up to $100,000, with any balance over that limit becoming uninsured. However, it is important to remember that additional coverage may be available depending on how accounts are held, such as when deposits are owned jointly with another person. The reduction in coverage starting in 2010 will not affect certain retirement accounts, which will continue to be protected up to $250,000.
• The FDIC has eased the rule governing "revocable trust accounts" that pass to named beneficiaries when the account owner dies. No longer does the FDIC consider only the account owner's spouse, child, grandchild, parent or sibling as "qualifying beneficiaries" for additional insurance coverage ($250,000 if there is one beneficiary, $500,000 if there are two, and so on). Now, an account owner can name any person or charity as a beneficiary and the owner will qualify for the additional deposit insurance coverage.
• Through year-end 2009, certain checking accounts at participating banks will be fully insured by the FDIC, no matter how much money is in them. This special insurance coverage applies only to no-interest checking accounts and certain other low-interest transaction accounts, and only at participating institutions.

Learn more about the FDIC's new publication, "Your New, Higher FDIC Insurance Coverage: How You Can Be Fully Protected."