Unlimited Insurance Approved For Some Checking Accounts

The FDIC voted to provide temporary unlimited coverage for noninterest-bearing transaction accounts. Implementing a section of the Dodd-Frank Act, the new coverage becomes effective Dec. 31, 2010 and will run through 2012. The unlimited insurance only applies to checking accounts that allow for unlimited number of transfers and withdrawals at any time, whether held by a business, individual or other type of depositor. The new insurance coverage is similar to the FDIC’s Transaction Account Guarantee program, but differs in the definition of “noninterest-bearing transaction, account.” TAG includes low-interest NOW accounts and Interest on Lawyer Trust Accounts, but those accounts will not be covered in the new program.