Managing Your Savings In An Economic Downturn

Money Report

If safety and soundness for your funds are important to you, you’re not alone. Consumers and businesses everywhere are seeking a safe harbor for their money during this economic downturn. Especially attractive right now are bank deposit accounts including certificates of deposit and money market accounts. These instruments pay competitive rates and offer the protection of FDIC insurance coverage.

Better still, the coverage limit was recently increased from $100,000 per depositor per account ownership type per bank to $250,000. (It is expected that the coverage limit will return to $100,000 at the end of 2009.) Your banker can help you title your accounts so that you can maximize your coverage.

You can also gain additional coverage for larger deposits by placing funds with a bank that is a member of the CDARS network. CDARS (pronounced “cedars”) is short for Certificate of Deposit Account Registry Service.

With CDARS, you work directly with one bank, but your funds are placed with other banks in the network in increments below the coverage limit. This ensures that your principal and interest are eligible for full FDIC coverage.

The start of a new year is a perfect time to review your savings plans, and your banker is here to help you. Best wishes for financial health in 2009.