Wednesday, July 16, 2008
INDYMAC DISASTER
Whenever I watched "It's A Wonderful Life," I literally thought a run on the bank was something only for the movies and could never actually happen in real life.
Well, Hollywood came to Pasadena and the surrounding areas that have IndyMac branches last Friday when the Bank went under. That left many people scrambling to take their money out and forced them to get a quick lesson on what FDIC-insured truly means.
Here's a brief run-down (I hope this is right):
1. Accounts that are FDIC-insured are insured up to $100,000 and $250,000 for retirement accounts.
2. Additional insurance only apply to beneficiaries. Some banks actually has a limit of 3 beneficiaries. So if you are sole owner, and specify 3 beneficiaries, you are insured up to $300,000.
3. If you have joined account, you are insured up to $200,000.
4. If you use a trust account (which IndyMac is freezing by the way), it is only acting as one ownership, so you are only covered for the $100,000.
The bottom line: diversify your money into different banks, making sure it will not grow beyond the maximum amount FDIC will insure.
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