Is your Money Safe? Part Two: Mutual of Omaha’s Wild Kingdom
When I wrote the first installment of this two-part Blog last week, I had no idea that more bank failures were so close on the horizon. But before we delve into my thoughts on steps you can take to protect your money, I thought a recap of recent events might help to inspire (if not incite) some of the procrastinators out there who’ve delayed the now urgent task of policing your deposits.
Mutual of Omaha’s Wild Kingdom
Federal regulators pulled the plug on another bank Friday, this one with nearly 30 branches in Arizona, California and Nevada. Today, Mutual of Omaha commenced with clean-up efforts by taking over deposits from First Heritage Bank of Newport Beach, its parent company, Arizona-based First National Bank Holding Co., and its spawns, First National Bank of Nevada and First National Bank of Arizona. The Phoenix Business Journal also reports that the Federal Deposit and Insurance Corp. (FDIC) will retain the banks’ real estate-plagued loan portfolios. Perhaps this will lighten the burden for Mutual of Omaha.
Insurance in an Unsure Time
As if we haven’t all heard the rumors, read the news and seen the red flags waving in the wind gusts produced by this financial storm, now is proving to be a better time than ever to examine your current level of FDIC protection and read up on other available opportunities to insure your deposits greater than $100,000.
Are your Deposits Earthquake Proof?
Amid the financial tremors in the banking industry, experts of every stripe are saying that if you’ve got deposits at any bank in excess of $100,000, your money is at risk. As we’ve all been learning in recent months, when it comes to insuring some of your weightiest deposits, some banks may be more equal than others. On this note, I would like to bring to your attention a great story MarketWatch ran in the wake of IndyMac’s demise. Here are some additional suggestions, observations and resources to help you to protect your money.
What Does FDIC Cover?
Here is the synopsis, but please don’t take my word for it, check with your bank and visit the FDIC Web site for the critical details.
- $100,000 for a single depositor,
- $200,000 for a joint account,
- $250,000 retirement accounts, with some exclusions and
- $100,000 for each owner of revocable trust accounts, if requirements are met.
The FDIC also provides separate insurance coverage for deposit accounts maintained in different categories of ownership such as joint accounts and revocable trust accounts. Make sure you’re clear on the regulations don’t hesitate to consult a financial professional if you’re not crystal-clear on what you’ve got and to what extent it is protected.
The $100,000 Question: Is your Bank Insured Beyond the FDIC?
Here are two examples of interesting approaches to insuring accounts beyond the FDIC’s scope. Unfortunately, only time will tell how well they hold water. Still, the opportunity to mingle convenience with your peace of mind is a rare one in financial planning. Depending on your situation and location, these options may be worth your second glance.
Spread your Wealth with CDARS
If your bank participates in Certificate of Deposit Account Registry Service (CDARS) program, you can have up to $50 million dollars in Certificates of Deposit (CDs) along with the security the FDIC offers for your funds
With CDARS, our bank spreads the CDs out among enough other banks to ensure that the part of your money in each bank is under the FDIC limits. In other words, you get the benefit of having multiple bank accounts with less than $100,000 in each one — without the headache of opening, tracking and managing multiple accounts yourself.
Once you’ve identified which CDARS bank will give you the best rates, accessing the program is easy. All you have to do to participate is sign a document agreeing to allow the bank to spread your money around. CDARS says there are no additional fees to you. And you only get the one bank statement.
see which CDARS bank gives you the best rates.
Depositors Insurance Fund (DIF) Covers Massachusetts
Massachusetts requires its state-chartered savings banks to carry expanded insurance through the Depositors Insurance Fund (DIF), which covers all deposits over the FDIC’s limits, so depositors have had relatively little to worry about since 1934, when the program was first implemented.
This is great news for those of us who bank in the great Commonwealth, but the rest of us may have to try a little harder to protect our finances from the economy’s swelling potential to shove more financial institutions off the edge and into failure’s ominous abyss
Get Ahead of the REI Pack
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Tags: CDARS, Certificate of Deposit Account Registry Service, Depositors Insurance Fund, dif, fdic, fdic insurance, fdic protection, First Heritage Bank, First National Bank of Arizona, indymac, irst National Bank of Nevada, Mutual of Omaha, Mutual of Omaha's wild kingdom, protect your money