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Coping in Tough Times: Is my Bank CD safe?


The Sun Sentinel answers your questions about the downturn every Wednesday in Your Money. Use the box at the right to send in yours.

I have $10,000 in a certificate of deposit at a local bank. If the bank fails, is the interest earned insured by the Federal Deposit Insurance Corp. or just the principal?

Your money — whether it is principal or interest — is insured up to $250,000 per depositor. The FDIC covers any interest earned through the date that a bank fails.

Very often, when a bank fails, its assets are picked up by another bank, which then either cashes out savers or agrees to continue the CD until the date it matures.

The institution would let you know. On brokered CDs, the same insurance limit — $250,000 per depositor per bank — applies. One word on uninsured deposits: The FDIC tries to pay something on them.

So far, in the failure of IndyMac Bank, depositors have received 50 percent of the $541 million in uninsured deposits. The FDIC is in the process of selling IndyMac to an investor group and potentially, there may be even more funds available to repay the uninsured deposits.

Categories: Coping in Tough Times (21)
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Comments

NO........Dont beleive it is,The Banks are ALL going Under REAL SOON


The FDIC will be insolvent soon, take out your money now!!!


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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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