FDIC Insurance Protection Is Offered For Certificates Of Deposit.

Rising from the ashes of the Great Depression, the Federal Deposit Insurance Corporation, or more simply known as the FDIC, was one of the biggest changes that the federal government made to the United States financial landscape in the 1930s. Many people are partially aware that the FDIC provides them with protection against a financial loss in their checking and savings accounts should their bank fail, but some Americans do not realize that the FDIC’s protection extends to certificates of deposit as well. Banking customers should ensure that the bank they invest with not only has the best CD rates but also has FDIC insurance. Banking at a financial institution without FDIC insurance is a recipe for disaster for any investor or banking customer.A Safe Savings Account is similar to a bank CD or a Annuity in that you safely invest money for a guaranteed interest rate. It is better than a CD or Annuity in that Safe Savings Accounts offer a higher interest rates than CD, TBills, or Mutual Funds without all the money gobbling fees of an Annuity. While banks give you an insurance policy in the form of an FDIC certificate to secure your deposits, SAFE savings accounts provide you with collateral in the form of real hard assets.



What Is FDIC Insurance?



The FDIC is a US government corporation created by the Glass-Steagall act of 1933.Since 1933, the Federal Deposit Insurance Corporation has insured Americans’ deposit accounts in banks. The FDIC is the federal government agency that supervises the commercial banks in America and insures deposits that are put in financial institutions’ products such as savings accounts, checking accounts, trusts, and certificates of deposit. After recent regulation changes, the FDIC now insures individual accounts up to $250,000 per depositor per bank against bank failure and fraud. In the case of joint accounts, the FDIC can also insure both parties for a total of $500,000 worth of protection in a single account.The convenient alternative to this would be to open different accounts at the same institution. Some certificate holders have over $250,000 at each credit union and bank. In an effort to maximize the interest rates and/or simplicity, investors have opened large dollar accounts at their financial institution. The good news is, under the right circumstances, these additional funds will be insured.



FDIC Insurance and Your CDs



In the 1980’s, the FDIC only insured $100,000 per account, but the recent recession brought sweeping financial regulation changes from Washington, D.C. For this reason the FDIC changed their guidelines to meet the needs of America’s banking customers and to ease their fears. A customer can have $250,000 in any individually owned certificate of deposit without fear of losing their money due to a bank failure in addition to their other checking and savings accounts held at the same bank.Rather than placing all of your principle sum in a single CD, laddering means purchasing CDs of varying lengths so that they come to term every three months, six months, or every year. So, for example, banking customers can have $250,000 in a checking account, another $250,000 in a savings account, and $250,000 in a certificate of deposit and still be under the protection limits of the FDIC.



With FDIC protection, banking customers can be free to search for the best CD rates knowing that their money is secure in the bank with the federal government protecting their assets. Certificates of deposit are a great investing tool for many Americans, and having FDIC insurance protection allows them to invest with peace of mind. All financial institutions have a website nowadays, in such websites they will post their interest rates on certificate of deposit accounts. While this is a very easy way to find out the CD rates a specific bank has to offer it is most certainly not the best. Using a comparison site that is able to gather information on CD account from several financial institutions is a much better way to find CDs with high interest rates. Ensure that you only invest in certificates of deposit at banks that are FDIC insured. It is possible to withdraw your investment early, but there may be a substantial loss in the interest you have earned when you do sell. Before deciding on a term and value for any CD you should consider your investment needs and financial demands.

Yolander Prinzel is the founder of several financial blogs on topics to find the best CD rates and other profitable investing opportunities. Always looking for a trusted financial institution for advice and tips he tends to look up information at http://www.discoverbank.com more often than not.