The Wall Street Reform Act permanently extends the FDIC’s $250,000 guarantee for deposits at banks, thrifts, and credit unions.  The FDIC guarantee was previously $100,000 per institution, but the guarantee was temporarily raised to $250,000 during the financial crisis.  The permanent increase has incentivized some risk-averse, higher-income clients to permanently allocated a larger percentage of their funds with banks and other FDIC insured financial institutions.

The increase comes at the cost of client allocations to more traditional investment products, insurance solutions, and annuities.  Increasingly, we see clients opening accounts with other insured institutions to maximize the $250,000 guarantee.  What many highly risk-averse clients do not realize is that there are opportunities to multiply the $250,000 guarantee many times over at a single institution, depending on how accounts are titled and who is named beneficiary of the account.  Read today’s article in your Advisor’s Journal at How to Increase the FDIC Guarantee (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

Tags: Business, Credit union, FDIC, Federal Deposit Insurance Corporation, Financial institution, Financial services, insurance, Savings and loan association, Wall Street

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