Notice of Expiration of the Temporary Full FDIC Insurance Coverage for Noninterest-Bearing Transaction Accounts
By operation of federal law, beginning January 1, 2013, funds deposited in a noninterest-bearing transaction account (including an Interest on Lawyer Trust Account - IOLTA) will no longer receive the unlimited deposit insurance coverage that was offered by the Federal Deposit Insurance Corporation (FDIC) from December 31, 2010-December 31, 2012. Beginning January 1, 2013, all of a depositor’s accounts at an insured depository institution, including all noninterest-bearing transaction accounts, will be insured by the FDIC up to the standard maximum deposit insurance amount ($250,000), for each deposit insurance ownership category.
The term “noninterest-bearing transaction account” includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes Interest on Lawyers Trust Accounts (IOLTA). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts.
For more information about FDIC insurance coverage of noninterest-bearing transaction accounts, click here.