Trust, but verify, when it comes to deposit insurance
Occasionally, when a financial institution fails a customer will learn the hard way that his deposits aren't insured in the manner he thought they were.

For example, after one recent failure, a customer said that when she set up a money market account and purchased a CD, she had asked the new accounts representative if the funds (with a combined total of well over $100,000) would be fully insured. She was reportedly told that they would, because the two were different types of accounts. Wrong!

The customer learned only after the FDIC became receiver that the bank employee was incorrect (or the customer misheard or misunderstood what she said). The two accounts had to be aggregated under the terms of the FDIC rules and would be insured, in the aggregate, only for up to $100,000.

Most bankers are well-versed in the intricacies of deposit insurance coverage, so this type of scenario should be rare, but smart customers will use tools readily available online from the FDIC to verify for themselves how the insurance will apply.

Just a couple of clicks away is FDIC's Electronic Deposit Insurance Estimator on our Bank Failures page in the Featured Links section. Nicknamed EDIE (for its acronym), it's a web-based, interactive application that allows you to put in all the information about your accounts and how they're structured, how much is in them, etc. and, based upon the insurance rules, it will calculate precisely what the deposit insurance coverage would be in the event the bank failed and provide a report. Oh, and did we mention it's free?

A few words of advice. When you go through it, you need to give it your total concentration and read each question carefully. You know the old saying with computer stuff -- garbage in, garbage out. If you don't put in the right information, the report generated will not be reliable. FDIC has created an incredible tool. Use it to help you make informed decisions about deposit insurance matters.