FDIC limit officially raised to $250,000

The Federal Deposit Insurance Corp. (FDIC) on Friday formally approved the increased insurance limit of $250,000 per regular account that was part of the financial rescue legislation enacted last week.

The FDIC board approved the temporary increase per account in a vote at a meeting. The new limits, which extend through the end of next year, also provide for an increase in the insurance ceiling on joint deposit accounts to $200,000 per co-owner of the account from the current $100,000. The limit for retirement accounts held in banks remains at $250,000.

The FDIC board on Tuesday approved a new plan for rebuilding the deposit insurance fund that would more than double the banking industry's average premiums next year. It could be formally adopted sometime after a 30-day public comment period.

The proposed increases in bank premiums would cover only up to the previous insured $100,000 limit per regular deposit account.

Thirteen federally insured banks and savings and loans - including two major thrifts - have failed this year, and more collapses are expected. The deposit insurance fund is now at $45.2 billion - below the minimum target set by Congress and the lowest level since 2003.

The FDIC plan aims to rebuild it within five years to an even higher level than the law requires.