President Barack Obama signed the new Financial Reform bill Wednesday, and one immediate change will be the current $250,000 limit on FDIC insurance for bank deposits and NCUA Insurance for Credit Union (CU) deposits becomes permanent. That’s great news.
Without this new law the $250,000 per-bank or credit union limit would have expired at the end of 2013 and we would have reverted to the old standard $100,000 per bank or CU limit on deposit insurance coverage. That means you no longer have to be careful about putting more than $100,000 in a long-term CD that would mature after 2013. Now you can keep up to $250,000 on deposit for any amount of time.
Without this new law the $250,000 per-bank or credit union limit would have expired at the end of 2013 and we would have reverted to the old standard $100,000 per bank or CU limit on deposit insurance coverage. That means you no longer have to be careful about putting more than $100,000 in a long-term CD that would mature after 2013. Now you can keep up to $250,000 on deposit for any amount of time.
That said, I wouldn’t necessarily rush to tie up big amounts of money in a long-term CD right now. With rates so low, that’s a long time to lock in a low rate. Better to keep your deposits shorter-term so you always have some money coming due that you can reinvest at higher rates. It may not happen this month, or during this year, but rates will indeed rise.
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