Read FDIC Unlimited Coverage for noninterest bearing accounts explained... text version

FDIC Unlimited Coverage for noninterest bearing accounts explained...

On October 13, 2008, the Federal Deposit Insurance Corporation Board established the Temporary Liquidity Guarantee Program to "preserve confidence and encourage liquidity in the banking system in order to ease lending to creditworthy businesses and consumers". One important component of the program is the Transaction Account Guarantee Program (TAGP). Under TAGP, accounts eligible for the guarantee include those earning no interest and requiring no advance notice of intended withdrawals. Basic FDIC insurance coverage is not changed nor affected by the rules applying to deposits covered under TAGP. Thurston First Bank has elected to participate in TAGP. Under this program, all noninterest bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account, through December 31, 2009. This coverage is in addition to and separate from the coverage available under the FDIC's general insurance rules. The TAGP unlimited insurance does NOT apply to interest bearing accounts, such as Money Market accounts, certain negotiable order of withdrawal (NOW) accounts, and Certificates of Deposit. However, those accounts are still insured up to the $250,000 limit.

What does this mean?

This means that ALL the monies you have on deposit with Thurston First Bank in noninterest bearing accounts are insured dollar for dollar.

What accounts are covered?

· Transactional checking accounts and funds swept or transferred to another type of noninterest bearing deposit accounts are fully insured. · Consumer and Business noninterest bearing transaction accounts are fully insured. · Consumer and Business interest bearing accounts earning equal to or less than 0.50% interest are fully insured. · IOLTA accounts are fully insured.

What accounts are not covered?

· Interest bearing accounts earning more than 0.50%. · Money Market deposit accounts do not have the expanded coverage. · Certificates of Deposit do not have the expanded coverage. · Savings Accounts do not have the expanded coverage. Expanded basic insurance coverage applies to balances up to $250,000.

When does it start?

Under TAGP, noninterest bearing transaction accounts, certain interest bearing accounts, and IOLTA accounts are fully insured from October 14, 2008 through when the financial institution elects not to participate or December 31, 2009. Financial institutions had to decide by December 5, 2008 if they were going to participate. Since Thurston First Bank elected to participate, our clients' accounts have been covered since October, 14, 2008 and will continue to be until December 31, 2009.

What is the Basic FDIC insurance coverage until December 31, 2009?

· Single accounts (owned by one person) - $250,000 per owner. · Joint accounts (two or more persons) - $250,000 per owner. · Corporations, Partnerships and Unincorporated Association Accounts - $250,000 per corporation, partnership or unincorporated association. · Government accounts - $250,000 per official custodian.

What happens after December 31, 2009?

January 1, 2010, the standard basic coverage limits will return to $100,000 for all deposit categories except your IRAs and certain retirement accounts maintained at other financial institutions up to $250,000.

How can I determine which banks are participating?

Banks participating in TAGP must post notices in prominent locations at their main offices, branches and on their websites using model FDIC language effective December 19, 2008. The FDIC will maintain a list of financial institutions not participating in the program on the FDIC's web site:

Who do I contact at Thurston First Bank with additional questions?

Call our client service specialists at 360-528-4111 or email [email protected]


FDIC Unlimited Coverage for noninterest bearing accounts explained...

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