CHRIS & COTY'S MONEY TIPS

As you know, the FDIC increased the insurance on bank deposits from $100,000 to $250,000 as part of the Federal Reserves' Rescue Plan. Moreover, while there are over a dozen banks that have closed and projections that hundreds more will follow suit, the FDIC will intervene and take over the banks in question.

In cases where your bank merges with or is purchased by another bank, you will still have access to your money and can continue to conduct business as usual. In fact, according to Kiplinger, "Both the FDIC's Web site and the National Credit Union Administration's site have a calculator that allows you to plug in all your accounts and the amounts deposited so you can find out whether any of your money is uninsured.

Follow up:

Go to www.fdic.gov and click on the Electronic Deposit Insurance Estimator (EDIE), or go to www.ncua.gov and use its Share Insurance Estimator Report."

Another point to be made is that "your money-market deposit account is lumped with all other accounts bearing your name, and together they are insured up to $250,000. Money that you keep in a money-market mutual fund may also be insured.

The Treasury recently announced a temporary program to guarantee both taxable and tax-free money-market mutual funds if the fund pays the necessary fee to participate. This insurance program was created after the Prime Reserve Fund "broke the buck" and its share price dropped to 97 cents. It guarantees that money-market funds’ share price will not fluctuate - that it will remain a constant $1.

Although there is some confusion as to money market accounts and money market mutual funds, here is information directly from the FDIC that will clear up any questions you may have.

What exactly is insured and what is not? "You are probably familiar with the traditional types of bank accounts - checking, savings, trust, certificates of deposit (CDs), and IRA retirement accounts - that are insured by the FDIC.

Banks also may offer what is called a money market deposit account, which earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. All of these types of accounts generally are insured by the FDIC up to the legal limit of $250,000 and sometimes even more for special kinds of accounts or ownership categories."

What is not insured? Non-deposits such as "mutual funds, annuities, life insurance policies, stocks and bonds unlike the traditional checking or savings accounts, however, are not insured by the FDIC."