Economic times are scary. Banks are folding, the economy is in a downward spiral and jobs are being lost all over. Since you are fortunate enough to still have a steady stream of income, you are primarily concerned with saving as much as possible and ensuring that you stay financially intact during these rough an unstable times. With a variety of accounts, including a transaction account, you are rightly curious if all checking accounts (aka transactional accounts) are insured.
Because of the recent failures of many of America’s banks, the FDIC made this official announcement October 14, 2008. “FDIC announced its temporary Transaction Account Guarantee Program, which provides full coverage for non-interest bearing transaction deposit accounts at FDIC-insured institutions that agree to participate in the program. The transaction account guarantee applies to all personal and business checking deposit accounts that do not earn interest at participating institutions. This unlimited insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2009.”
Steps have been taken since the Great Depression to help insure and stabilize our economy. It started with the Glass-Steagall Act of 1933. Included in that act was the creation of the Federal Deposit Insurance Corporation (FDIC). During the Great Depression, people freaked out and amidst rumors that banks were failing and not returning the money of the account holders. In direct response, people withdraw their resources at the same time, which ultimately caused the banks to run out of money. So, if the same thing were to happen now, your checking account would indeed be covered.
Before opening an account of any kind you have that right to check to make sure your bank has FDIC insurance. A simple phone call or a quick review of their terms on their website will prove that they are and help put your worse fears at bay.
