This is a Wall Street Journal article giving ways to increase your FDIC coverage

Some Options for Protecting Accounts

By JILIAN MINCER
July 22, 2008; Page D6

NEW YORK -- Money sitting unprotected in the bank doesn't have to stay that way.

The Federal Deposit Insurance Corp. guarantees deposits of less than $100,000 but says that about 37% of domestic bank deposits aren't insured.

That's because the FDIC insures checking accounts, savings accounts and certificates of deposit, but not other financial products that are now being offered at banks -- including mutual funds, annuities and life insurance. The National Credit Union Administration provides the same protection to credit-union deposits.

Evans Vestal Ward for The Wall Street Journal

Amid troubles at banks like IndyMac, consumers want more protection.

This isn't cause for panic since the vast majority of financial institutions remain sound -- despite the recent failure of IndyMac Bank and the current troubles for several other big banks. Only 90 of the nation's approximately 8,500 banks and savings associations are currently on the FDIC's list of problem banks.

Still, those wishing to take no chances have several options for making sure their bank or credit-union accounts with balances greater than $100,000 are protected.

One simple move is to open a joint account, which is insured for up to $200,000. Additional accounts could protect even more assets, says Kathleen Thompson, senior vice president of compliance at the Credit Union National Association. Ms. Thompson says that the joint account she has with her husband is protected for up to $200,000, but that adding her son to the account would add another $100,000 for a total FDIC-coverage amount of $300,000.

An individual retirement account held at a bank is insured by the FDIC for up to $250,000. That applies only if the retirement account is invested in bank products and not stocks or mutual funds.

Another option is to open a revocable trust account, which is a deposit owned by one or more persons who intend to leave the money when they die to a named beneficiary. Each owner of a trust is entitled to FDIC insurance of up to $100,000 for each designated beneficiary. This means the account can be insured for up to $300,000 if there are three named beneficiaries. The catch is that only certain beneficiaries are covered, including a spouse, child, grandchild, parent or sibling. Nieces, nephews, friends and charities don't qualify.

"Consider multiple banks and don't rely on advice from banker tellers," says Deirdre Cummings, legislative director of the consumer advocate MASSPIRG. "Instead, you need to go to the FDIC."

Ms. Cummings says if you get incorrect information from a bank employee, you're stuck, so go directly to the source -- the FDIC Web site or its staff.

Consumers also need to be aware that if their banks merge, their deposits may climb higher than the protected $100,000.

Another alternative for consumers is to use a bank that participates in the Certificate of Deposit Account Registry Service, or CDARS, which enables consumers to get up to $50 million in FDIC insurance, says Phil Battey, a spokesman for Promontory Interfinancial Network, which sells CDARS.

Currently, about 2,150 institutions, or about a quarter of all banks, offer the service. The way it works is that a customer with more than $100,000 opens a CD at a participating bank. That institution keeps $100,000, and the remaining money is distributed electronically in amounts of up to $100,000 to other CDARS banks.

If someone has $1 million, for example, the money would be divided at 11 institutions, Mr. Battey says, because they like to keep the principle and accrued interest under $100,000.

Consumers get to see what banks will receive the other deposits, and could eliminate them from the list, he says. Consumers aren't charged for the service, but the banks pay 12 and one-half basis points, or 12 and one-half cents per $100 of coverage. A basis point is one-hundredth of a percentage point.

Mr. Battey says that clients include businesses, individuals and local governments. About 15% of them are local governments. Individuals account for the largest group with an average account size of $400,000 to $500,000.

"Most consumers have faith in their banks," says Ami Shaver, senior vice president of retail banking for United Bankshares Inc., which provides CDARS to its clients, but she added coverage "does ease their concerns."

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