You know that the economy is on shaky ground when the hottest topic in personal finance is making sure your bank deposits are insured. Many of us never think about what would happen to our money if our bank closed its doors. Almost all traditional commercial banks insured their deposit accounts up to $100,000, which is enough coverage for the average citizen. However, some of you are blessed with an abundance of money and $100,000 might not be enough. Many small businesses carry bank deposit balances over $100,000 as well. Traditionally, the only way to make sure you are fully insured is to spread out your money to multiple banks in $100,000 increments. In fact, Clark Howard suggests that you spread it out in increments of $90,000 to account for the interest you’ll accrue on the money. So, if the worst happens and your bank closes up shop, you’ll insure your interest as well.
Never fear, because there is a company that came up with a solution for individuals and businesses who need more than $100,000 in deposit protection. The company is called CDARS, and they will insure your money up to $50 million dollars. Go to their website and locate the bank nearest you that participates in the CDARS program. CDARS will take your money and disburse your money into various CDs up to $90k to $100k for each CD. They take the hassle out of disbursing the money yourself. You get one interest rate and one statement. There are no hidden fees.
If you are a small business owner, I strongly suggest that you sign up for this program at the bank closest to you. With the way the bad debts from the housing market are affecting investment and commercial banks, you can never be too safe with your deposits. Don’t be like one of the thousands of IndyMac customers that lost a portion of their deposits, because they did not have enough FDIC insurance.