How To Avoid Losing Your Money During A Bank Failure

The recent IndyMac bank failure has many people uneasy about banking. Many are now wondering if their money is safe. One way to avoid losing your money is to make sure your bank participates in insuring your money with FDIC insurance. Most do, but not all. FDIC insurance guarantees that your money, up to $100,000, will not be lost due to a bank failure. Unfortunately, not all funds, such as annuities, are secured by FDIC insurance. About.com's Banking/Loans guide, Justin Pritchard, has an informative article on FDIC insurance and how it works.

So, do you have more than $100,000 that you would like to keep insured? Well, you could always spread the money out in a variety of banks, but some banks can take care of that for you. According to a recent article at www.marketwatch.com, the Great Florida Bank is offering "up to $50 million in FDIC insurance coverage. " Here is how they are able to do this: "When a customer places a large deposit with Great Florida Bank, the Bank arranges for the placement of funds into CDs issued by other network member banks -- in increments of less than $100,000 to ensure that both principal and interest are eligible for full FDIC insurance coverage. Customers benefit from the ease of working with only Great Florida Bank, and receiving only one account statement."

This is great for someone who has a large amount of money that they need insured, but of course they are not going to do this for free, so be aware of the additional fees that may be associated with having one bank organizing all of your deposits with their network banks.