I know that the FDIC insures money you have in the bank up to $100,000, but I also have more than $150,000 in an IRA with my bank. Are my retirement funds also safe or should I move that money elsewhere?
—W. D. Smith
First, make sure your bank is backed by the Federal Deposit Insurance Corp.; the National Credit Union Administration insures credit unions. Savings, CDs, money market accounts (not to be confused with money market funds) in FDIC-insured banks are now covered up to $250,000 per account owner. Credit union accounts are covered for $100,000 per owner and up to $200,000 for joint account holders.
The FDIC does not insure money market mutual funds, which invest in short-term debt instruments. But in response to the financial crisis, the U.S. Treasury announced over a year ago that it would guarantee those funds for the next year.
You don’t need to relocate your accounts. IRAs and other retirement accounts, such as a Keogh or SEP plan, in FDIC-insured banks or NCUA-insured credit unions are guaranteed up to $250,000 per owner.
Carolyn M. Brown is editor-at-large at Black Enterprise magazine.