July 2008
Financial safety nets
Given today's headlines, you may wonder who protects your money in case a financial institution goes under. Here's information
on the entities that back up various types of accounts:
Bank or thrift. The Federal Deposit Insurance Corp. covers at least $100,000 per person ($250,000 for some retirement accounts) at each institution.
Credit union. Most are insured by the National Credit Union Administration. Some supplement NCUA insurance with private American Share Insurance, not government-backed. Still others use only American Share.
Broker. The Securities Investor Protection Corp. gives each investor $500,000 of protection to recover lost assets if a brokerage belonging to the SIPC closes or becomes insolvent.
Defined-benefit pension. The federal Pension Benefit Guaranty Corp. covers most workers with traditional retirement plans.
401(k). There's no federal fund to repay investors' losses, but invested retirement money might be protected by programs that apply to relevant financial institutions.
Insurance. Many products are protected by state associations funded by the insurance industry. Coverage varies. For more, go to www.nolhga.com and www.ncigf.org.
Bank or thrift. The Federal Deposit Insurance Corp. covers at least $100,000 per person ($250,000 for some retirement accounts) at each institution.
Credit union. Most are insured by the National Credit Union Administration. Some supplement NCUA insurance with private American Share Insurance, not government-backed. Still others use only American Share.
Broker. The Securities Investor Protection Corp. gives each investor $500,000 of protection to recover lost assets if a brokerage belonging to the SIPC closes or becomes insolvent.
Defined-benefit pension. The federal Pension Benefit Guaranty Corp. covers most workers with traditional retirement plans.
401(k). There's no federal fund to repay investors' losses, but invested retirement money might be protected by programs that apply to relevant financial institutions.
Insurance. Many products are protected by state associations funded by the insurance industry. Coverage varies. For more, go to www.nolhga.com and www.ncigf.org.
