FDIC Insurance Coverage for IRAs
Published in Rules | 6 Comments
With all the chaos in the financial markets, you’re probably a little concerned as to what will happen to your Roth IRA or Traditional IRA in the event your bank goes under. Fortunately, you don’t have to be as long as you have less than $250,000 in your account at a particular bank. Effective April 1st, 2006, the coverage limits for retirement accounts, which include traditional and Roth IRAs, was increased from $100,000 (the same as deposit accounts) to the current level of $250,000.
The other retirement accounts included are self-directed Keogh accounts, 457 Plans for state governemnt employees, and employer-sponsored “defined contribution plans” like 401(k)s.
Remember, this is protection again bank failure and does not cover the value of your assets. For example, if you bought a particular stock and it loses value, FDIC does not protect you against that (that would be completely unreasonable). However, if your bank does go under and it was the administrator of a 401(k) plan, you’d be protected up to $250,000.
October 8th, 2008 at 4:14 pm (#)
I have a ROTH IRA at Bank of America Investment Services, Inc. The statement states that “Investiment products provided by Bank of America Services,Inc. ARE NOT FDIC INSURED – ARE NOT BANK GUARANTEED.
Is there a list of banks that do carry FDIC insured ROTH IRAs?
October 24th, 2008 at 9:49 am (#)
I have a roth IRA with an insurance company..If the insurance company goes under, will my roth be covered like a bank through fdic or some other means?
February 10th, 2009 at 2:01 pm (#)
Although your IRA is with Bank of America Investment Services, you may still have FDIC insurance. It depends upon the product your money is invested in. If you have Stocks, Bonds, Money Market Mutual Funds, etc, you are not covered by the FDIC. However, if you have an IRA with Bank of America invested in a bank CD, you will have FDIC insurance. It all depends upon what product your money is invested in.
February 28th, 2009 at 9:54 am (#)
question, I transfered IRA money from one credit union to another and put it into a IRA CD ,the amount was in excess of the $ 250,000, they advised by having my wife as beneficary on the account it would be insured up to 500,000 ? is this correct. Thank You
August 30th, 2009 at 3:15 pm (#)
William, I just stumbled onto your question regarding additional FDIC coverage by adding your spouse. I have a major problem with a bank who tried that and still contends that it is legal, although my husband is the sole owner of the IRA (not a ROTH). Can anyone tell me if a bank can do a simple POD account with one person’s IRA? Thank you
October 13th, 2009 at 3:13 pm (#)
I am in a bind, I am looking for a FDIC insured and bank guarenteed Roth IRA for myself. I have a 403b from a previous employer from a hospital and want to roll-over.
I do have Bank of america account and looked at their options, but I don’t like a few of their terms. I also want to find out about custodial IRA’s for my 6yr old son.
HELP!
Melissa Baghoumian