Due to the recent volatility in the economy, many people are opting to save money in traditional bank accounts. However, with several banks failing in recent months, are banks still a safe place for large deposits?

"Thanks to the Federal Deposit Insurance Corporation (FDIC), banks remain a very secure option for money," explains Orly Segal, a financial center manager with Fifth Third Bank. All deposits are now insured up to the basic amount of coverage of $250,000 per depositor per insured bank. This amount was increased from $100,000 to $250,000 on October 3, 2008, when President George W. Bush signed the Emergency Economic Stabilization Act of 2008. This increased coverage is temporary and effective through December 31, 2009. Coverage for self-directed retirement accounts, such as Individual Retirement Accounts (IRAs) will continue to be insured up to $250,000 after December 31, 2009.

Brief history of the FDIC
FDIC insurance did not exist during the Great Depression, when thousands of banks failed and many people lost deposits. When President Franklin D. Roosevelt took office in 1933, resolving this crisis was his top priority. By helping create the FDIC, he not only guaranteed deposits, but also helped restore the public's confidence in the nation's banking systems.

What accounts are insured?
"The FDIC automatically insures all traditional bank deposit accounts, such as: checking, savings, certificates of deposit (CDs), individual retirement accounts (IRAs), negotiable order of withdrawal accounts (NOW) and money market deposits," explains Segal.

When people have more than $250,000 in deposits, the FDIC allows depositors to qualify for more than the basic coverage amount if they maintain accounts in different ownership categories. For example, they may have deposits in single accounts, joint accounts or revocable trust (e.g. POD) accounts. They can title accounts differently by adding another person's name as "payable on death" or "as trustee for." Deposits held in different ownership categories are separately insured. In addition, Fifth Third customers can maximize their FDIC coverage amount by placing deposits in other Fifth Third Banks located in a different state and organized under a different bank charter. Deposits held by Fifth Third's three bank charters are separately insured. When re-titling your accounts, it is important to consult with your attorney and tax advisor to account for any impact on your estate plan or tax situation.

"At Fifth Third, Financial Centers are trained to properly assist depositors on account ownership and titling options to help ensure customers have the information they need to make decisions that will provide for the maximum amount of FDIC insurance coverage available. This gives them the convenience of working with just one bank," Segal explains. She also reminds people that Fifth Third bankers can advise them on which accounts may help them earn the greatest interest.

For more information on protecting your bank deposits, contact Fifth Third at (866) 475-4201 or visit 53.com.