by Calculated Risk on 12/29/2009 02:38:00 PM

Kathleen Pender at the San Francisco Chronicle reminds everyone of the changes to the FDIC's Transaction Account Guarantee Program: $250,000 in bank? Check deposit insurance

There is no change for those with less than $250,000 in the bank:

Deposits at all banks will still be insured up to $250,000 through 2013 under the FDIC's general deposit insurance rules, so the vast majority of consumers don't need to worry. But starting Friday, checking account balances that exceed $250,000 will no longer be covered under the FDIC's Transaction Account Guarantee Program at some banks.
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Although few individuals keep more than $250,000 in a checking account, many businesses and nonprofits do to handle payroll, accounts receivable and other cash-flow needs. Even a small business might occasionally have a balance exceeding $250,000 when a large payment comes in or a big bill is coming due.

The FDIC's Transaction Account Guarantee Program will continue (insuring non-interest-bearing transactional accounts above $250,000), but the FDIC raised the fees and many banks have opted-out.

The program was supposed to expire at the end of this year, but in August the FDIC announced it would continue through June 30. However, starting Friday the fee will jump to 15, 20 or 25 cents per $100 in insured deposits, depending on the bank's risk category.

Banks had until Nov. 2 to tell the FDIC if they would opt out of the program at the end of this year. The FDIC could not say how many banks did, but many large ones - including Citibank, Bank of America, Chase and Wells Fargo - have disclosed they are dropping out.

What matters for most people is that deposits are still insured up to $250,000. For more, here is the FDIC site: Your Insured Deposits