You can also set up the CD's as POD for one or more CD. Or even better to keep all the $$$$ in your name set up a jumbo CD through a CDARS program. That way your money is spread around with no individual bank holding over $100K at maturity. You could have $1 million (or more) and your primary bank will allocate to bans across the country
What is POD and CDARS program please? Sounds interesting. This thread good me motivated so I called my credit union where I have the most money and they said yes it's 200k for joint and then an additional 100k for every qualified beneficiary. This would be parents and siblings.
Stay far away from FITB. They are tee totally horrible. To be quite candid, I don't care much for banks. After being on the inside of one ONCE, I want to take a shower every time I hear the word bank. My personal accounts in the U.S are at BAC, and Chase. I'm not saying they're "good" either. They're just who I bank with. I said bank too much today. Time for a shower.
POD = Payable on Death Say you have $190K with Bank XYZ. You keep $95K in your name in a money market (checking, etc.) account. Then you have a 2nd account set up, also in your name, but with a POD designation. You'd basically sign the paperwork to designate your wife, sibling, son, daughter, .... as the person who would receive the funds in the event of your death. CDARS = Certificate of Deposit Account Registry Service With CDARS you can be insured by FDIC up to $10 million. Say you have $250K you want to keep in CD's. Your bank, assuming they are a member of the CDARS program, will take the $250K and allocate it to various other banks such that no bank will have more than $100K when the CD matures. Maybe they allocate $95K to Bank A, $95K to Bank B and $60K to bank C. At maturity, if you have chosen to reinvest the funds, they'll repeat the process and the money will end up at other banks for the next term of the CD. I've used CDARS for a few years.
Thank you. I know about POD, but forgot the acronym. That's how my CD's at my credit union are set up. I like the CDARS I am going to see if NCUA has any equivalent for credit unions.
http://www.northjersey.com/business/news/Investments_werent_so_safe.html how bout Wachovias ARS..............this local guy had 1mm frozen on him by Wachovia.......
There's really no excuse for having a CD in an amount that exceeds FDIC insurance limits. But in practice, you're not likely to have a problem. I lived in Houston in the '80s and was always chasing high interest rates on my CDs (routinely 12+%). The banks paying the highest interest rates were most likely to fail and 3 or 4 times it happened. In each case the FDIC was able to have another bank take over the failing bank which preserved everyone's account regardless of size. But the downside was that CDs paying above market interest rates were cancelled. I was able to either pull my money without penalty or accept a lower interst rate. Only if there's an actual bank failure like Indymac, with no other bank coming to the rescue, will there be accounts that loose some of their money.