FDIC Insurance Coverage for IRAs

Published in Rules  |  2 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.

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  1. Dennis Gibbs says:

    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?

  2. frank cool says:

    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?

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