Bank CD Rates September 29, 2009

Interest rates were mostly lower on the close of Monday, September 28.  The six month Treasury rate dipped two basis points or 2/100 of a percent to close at 0.18%.  The one year Treasury was down one basis point ending at 0.40%.  The two year Treasury was unchanged at 0.98%.  The five year Treasury rate was pushed lower three basis points moving from 2.36% on Friday to 2.33% on Monday.  The ten year also lost three basis points to close at 3.31%.

There has been a noticeable influx of email regarding when the FDIC insurance temporary increase to $250,000 from the previous $100,000 per depositor that was due to expire in December 31, 2009.  Though there was a great deal of attention paid to the expiration of the money market fund insurance that did expire as originally proposed on September 18, 2009 there was little attention paid to the extension back in May on the FDIC coverage extension.

In May of this year, the FDIC insurance coverage temporary increase had been extended to the end of 2013.  President Obama signed a bill that postpones the original expiration date of the increased FDIC insurance limits on bank deposit accounts including bank CDs.  Under the new law, which simply extends the expiration of the temporary increase in FDIC insurance, the standard FDIC insurance limit of $250,000 dollars per depositor will continue until December 31, 2013.  Prior to the signing of this law, the increase last year from $100,000 dollars per depositor to $250,000 dollars per depositor was set to expire at the end of this year.

As of now, on January 1, 2014, the standard FDIC insurance amount will return to the amount of $100,000 per depositor for all account categories except certain retirement accounts, which will remain at $250,000 per depositor.

As a reminder regarding FDIC coverage, FDIC insurance covers most all types of bank deposits that are held at an insured bank, including those bank deposits in checking accounts, NOW accounts, and savings accounts, money market deposit accounts, and certificates of deposit (bank CDs).

FDIC deposit insurance covers the balance of each depositor’s account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank’s closing.

The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these investments were bought from an insured bank.

Tags: and savings accounts, bank, bank CDs, bonds, certificates of deposit, checking accounts, FDIC, interest rates, money market deposit accounts, NOW accounts, rates, Treasury rate

This entry was posted on Tuesday, September 29th, 2009 at 8:55 am and is filed under Money Rates. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.