Q: After reading about the losses by Wachovia and other banks, are time deposits or CDs under $100,000 insured by the FDIC?— Joe Jelinek, Castle Rock
A: In a word: Probably.
The Federal Deposit Insurance Corp. was created in 1933 to help consumers feel a little more at ease with placing their money into a financial institution.
It wasn’t all that long ago that folks thought the safest place for their dollars was under the mattress — and for good reason, because runs on banks in the 1920s and early 1930s were liquidating resources quickly.
Once the FDIC began insuring deposits — and any of their accrued interest — consumers came back. The limit of that protection, though, is typically $100,000 but can be more if the bank pays for it.
More important, not every bank and thrift is FDIC insured — though virtually all are — and that’s a question you should ask your financial institution before you put any money into an account there.
The FDIC insures deposits only, and that would include time deposits — better known as CDs — savings, checking, money market and NOW (negotiable order of withdrawal) accounts. What it won’t insure are investments such as stocks, mutual funds, bonds, annuities or life insurance policies, even if they’re offered by an insured bank.
Accounts such as IRAs and Keoghs, however, are insured separately, usually up to $250,000.
David Migoya wants to get the answers to your consumer questions. E-mail consumertips @denverpost.com or write Consumer Shopping Bag, The Denver Post, 101 W. Colfax Ave. Suite 600, Denver, CO, 80202.
