In our day-to-day business, we find that a banking concept that is oftentimes confusing and misunderstood by many of our customers is FDIC insurance. So today I thought I’d take a moment and shed some light on both the history of FDIC insurance and how your deposits are protected today.
FDIC insurance was created back in 1933 in the wake of the Great Depression. It was instituted as a result of thousands of bank failures in the U.S. in the 1920s and 1930s. During that precarious financial time, many bank customers lost staggering sums of money. Gaining access to money in banking institutions during this crisis was on a first come, first serve basis – if customers didn’t get their money out of the bank before it went under, they were out of luck. On the coattails of this financial disaster, individual states attempted to insure deposits. However, they were all unsuccessful.
Amid fear and chaos, President Franklin D. Roosevelt signed the Banking Act of 1933 into law. This act created the FDIC as a temporary measure to restore order to the U.S. banking system. Consequently, bank failures and bank runs (the concerted action of depositors who withdraw their money because they believe the bank is about to fail) quickly declined, suggesting that the FDIC was a successful measure in bolstering consumer confidence and the banking system in general. The U.S. Treasury funded the initial FDIC insurance with $289 million. These funds were repaid to the Treasury in 1948.
FDIC was made a permanent agency under the Banking Act of 1935. This new act refined how the organization would work (e.g. under this act the insurance was now funded by banks instead of the U.S. Treasury). Today, the FDIC proudly notes that since the Banking Act of 1935 was enacted “no depositor has lost a single cent of insured funds as a result of a failure.”
The goal of this permanent agency was and still is to promote trust in our banking system. Simply put, if your deposits are FDIC insured, the U.S. government stands behind the promise to make them whole if the bank fails.
The FDIC runs an insurance fund – a giant pool of money that can be utilized in the event of a bank failure. The money in this fund doesn’t come from taxpayer dollars as some depositors assume. The money is funded through premiums paid by FDIC insured banks and the earnings on the assets in this fund. These banking institutions pay into this fund to pay their depositors if they should someday fail as well as to help pay for other banks that fail.
On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Act. This act, in part, permanently raised the current standard maximum insurance of $100,000 to $250,000.
So, what does this mean to you?
This means that in the event of a bank failure, the FDIC insurance coverage limit of $250,000 applies per depositor, per insured depository institution for each account ownership category.
The FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking and savings accounts, money market deposit accounts, certificates of deposit (CDs) and certain retirement accounts. This insurance however does not protect money invested in stocks, bonds, mutual funds, exchange-traded funds, life insurance policies, annuities or municipal securities. It is important for depositors to understand these distinctions.
What are the basic FDIC coverage limits?
Single Accounts (owned by one person with no beneficiaries) – This is a deposit account owned by one person and titled in that person’s name only, with no beneficiaries. All single accounts at the same insured bank are added together and the total is insured up to $250,000.
Joint Accounts (two or more persons with no beneficiaries) – This is a deposit account owned by two or more people and titled jointly in the co-owners’ names only, with no beneficiaries. If all co-owners have equal rights to this money, each co-owner’s shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000.
Revocable Trusts (Formal and Informal) – A revocable trust account is a deposit account owned by one or more people that identifies one or more beneficiaries who will receive the deposits upon the death of the owner(s). A revocable trust can be revoked, terminated, or changed at any time, at the discretion of the owner(s). The term “owner” means the grantor, settlor, or trustor of the revocable trust.
This ownership category includes both informal and formal revocable trusts:
• Informal revocable trusts — also known as payable on death (POD), in trust for (ITF), testamentary, or Totten Trust accounts — are the most common form of revocable trusts. These informal revocable trusts are created when the account owner signs an agreement — usually part of the bank’s signature card — stating that the deposits will be payable to one or more beneficiaries upon the owner’s death.
• Formal revocable trust — also known as Living trusts or family trusts — are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the deposits in the trust during his or her lifetime. The trust document sets forth who shall receive trust assets after the death of the owner.
Deposit insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner), a charity, or a non-profit organization (as defined by the IRS).
Revocable trust coverage is based on all revocable trust deposits held by the same owner at the same bank, whether formal or informal. If a revocable trust account has more than one owner, each owner’s coverage is calculated separately, using the following rules:
• Revocable Trust Deposits with Five or Fewer Beneficiaries — Each owner’s share of revocable trust deposits is insured up to $250,000 for each unique eligible beneficiary named or identified in the revocable trust (i.e., $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries.
• Revocable Trust Deposits with Six or More Beneficiaries — Each owner’s share of revocable trust deposits is insured for the greater of either (1) coverage based on each unique eligible beneficiary’s actual interest in the revocable trust deposits, with no beneficiary’s interest to be insured for more than $250,000, or (2) $1,250,000.
Determining coverage for revocable trust accounts that have six or more beneficiaries and provide different interests for the trust beneficiaries can be complicated. Please don’t hesitate to contact our office if you need assistance in determining the insurance coverage of your revocable trust or should you have any questions concerning your FDIC coverage.
Spring has sprung! And so has our sense of urgency to clean our closets, houses, garages and all of the stuff that has piled up over the winter months. What most of us don’t realize is these chores can be hard on our bodies. In fact, according to Kessler Institute for Rehabilitation, a national leader in the field of physical medicine and rehabilitation, millions of home-related injuries occur every year as we clean our way into the warmer months.
Typically, we all try to do too much too quickly. If you are anything like me, you feel the overwhelming desire to get this done in the shortest time frame possible – warp speed!
Cleaning chores involve stretching, lifting, climbing, pushing, pulling, climbing, twisting and turning – movements most of us don’t do on a regular basis. Many of these movements use muscles we wouldn’t typically use even in a daily exercise program. In addition, most of us don’t take the necessary precautions to avoid injuries. Many common injuries are the result of improper bending or lifting or not using our common sense when it comes to safety, e.g. securing and stabilizing a ladder before climbing to reach the hard to reach areas that require our spring cleaning attention.
To help us all get the job done safely and without injury, below are some helpful tips:
- Set realistic goals – Rome wasn’t built in a day and either is our thorough annual cleaning. Tackle one project at a time. Spread projects out over a few days or even several weekends. I know…this is killing you…us… A+ personality types, but this will alleviate our tendency to overdo and give our bodies some rest in between.
- Check all equipment that is needed for cleaning projects – Make sure all ladders, stools, etc. are in good solid working order before beginning a project.
- Work safely – Make sure all cleaning areas are free of clutter and well lit. Make sure to work in well-ventilated areas when using cleaning solutions and chemicals and keep them away from children and pets.
- Ask for help – We have a tendency to think that the only way anything gets done right is if we do it ourselves. Well, that may be true but, other people live in the house and they should all do their part too. Assign tasks so that everyone shares in the workload. In the end, everyone will feel good…especially about the sense of accomplishment.
- Use proper cleaning techniques – Using the correct body movements can help minimize risk of injury. Here are a few recommendations.
- Lifting and carrying – Always have someone help you with heavy boxes or when moving furniture and remember bend your knees and lift with your legs, not your back.
- Windows – Always keep your feet on the ground or on a secure ladder/step stool. Never climb on furniture or windowsills. Yes, I know, we’ve all been guilty of this. Keep level with the area that is being cleaned to avoid overstretching. Also try to keep your back straight and avoid tilting your head upward or backward, especially for long periods of time.
- Painting – Always keep paintbrushes and rollers in front of you and waist high. This will avoid stress on the spine. Looking up at high walls or ceilings for long periods of time puts extra pressure on the neck, which can cause pinching and numbness. Again, although we’d all like to have a freshly painted house before the sun goes down, we will benefit immensely, body and mind, if we practice patience – paint in short intervals and take frequent breaks.
Getting our house in order is good for the body and the soul. It’s great exercise and we feel such a sense of accomplishment when it is completed. But, let’s be sensible. We must our limits, take frequent breaks and always drink plenty of fluids.
Here’s to spring! Now let the cleaning begin!
The week of February 25 – March 2 is “American Saves Week.” “America Saves Week,” which was coordinated by America Saves and the American Savings Education Council, was started in 2007. America Saves is a national campaign comprising more than 1,000 non-profit, government and corporate groups that encourages individuals and families to save money and build personal wealth. The Consumer Federation of America manages the America Saves campaign. The American Savings Education Council is a national coalition of public and private institutions committed to making saving a priority for all Americans.
“America Saves Week” provides an annual opportunity for organizations to promote good savings habits and a chance for individuals to assess their current savings status – how much they have saved in their non-retirement and retirement savings.
Results from the 2012 Annual National Survey Assessing Household Savings showed that having a savings plan with specific goals and objectives has beneficial financial effects, even in lower-income households. But the key is to have a plan to save!
So, let’s get started.
A great place to begin is by setting a goal. What would you like to save for – an emergency fund, a home, a vacation, a new car, pay off revolving credit card debt, retirement, etc.? Knowing what you are saving for provides the motivation to save. Note: If you don’t have an emergency fund, this should take precedence over your other saving goals. You should have at least $500 of emergency savings – this will alleviate using high interest rate credit cards for unexpected expenses. After this saving goal has been achieved, the next goal is to put money aside to pay off any credit card debt.
The next step is to make a plan. How much are you going to save monthly? The best way to come up with this figure is by making a budget. Yes, I know, the ever-dreaded budget. But unless you know where your money is going you can’t determine how much you can save…more importantly where you can save…where you can cut back. The most important factor in making a budget is making an accurate budget – accounting for every expense to include your daily Starbucks Vanilla Latte habit. The budget process is very similar to a diet – you don’t know how much you are eating until you keep an accurate food log. Your expenditure log is your budget. I can promise, this exercise will be extremely eye opening.
The final step is to begin saving automatically. Routinely putting money away is difficult for most of us. But if you make saving automatic, you will never miss having that money.
Once you determine how much you are going to save each month or pay period, either have your employer direct deposit that portion of your paycheck into a savings account or if your employer doesn’t use direct deposit, immediately transfer that part of your pay into an established savings account. The most important piece of this savings plan is discipline. Once you determine how much you are going to save, treat this amount like a bill – pay it and pay it on time!
For more information on “America Saves Week” and/or helpful tips on saving, visit AmericaSaves.org. You can also follow America Saves on Facebook and Twitter.
In a world where technology is king, identity theft has become a growing problem. Identity theft can go undetected for years, especially if the victim is a child.
Identity theft among children age five years or younger doubled in the past year. Children are being targeted for identity theft 35 times more than adults (www.jacksonsun.com, Tips to Prevent Child Identity Theft, Randy Hutchinson, Jan. 4, 2013).
Social security numbers that belong to children are unused. They are a blank slate for identity thieves. Once this thief steals a child’s information, it may be years before it is detected. Most identity theft occurs over the Internet. Typically the thieves steal the child’s social security number, attach a different name and birth date to it and proceed to open credit cards, auto loans and even home mortgages.
The child usually doesn’t have a clue until he or she applies for credit card, a student loan, a job or possibly an apartment lease. The identity thief may be a family member, sometimes even a parent, who is having financial difficulties or someone completely unknown to the family or the victim.
According to the Federal Trade Commission (FTC), there are several red flags that indicate that your child’s personal information has been comprised. The following warning signs have been identified by the FTC:
- Your child gets calls from collection agencies or bills from credit card or other companies, or offers of credit.
- Your child or family is denied government benefits because they are already being paid to someone else using your child’s social security.
- The IRS or another governmental agency asks you to confirm that your child is employed – even though your child has never had a job.
- After filing your tax return listing your child as a dependent, you are notified by the IRS that your child’s social security number and information is listed on someone else’s tax return.
- Your child gets a notice from the IRS that he or she has failed to pay taxes even though he or she has no income.
Although some of the advice for preventing identity theft applies to both adults and children e.g. don’t provide personal information in response to unsolicited emails or other messages, keep documents containing personal information secure, if you are scanning personal information make sure that your antivirus is up to date and it’s password protected, and shred unwanted personal documents, some special tips for children include:
- Talk to you child. Go over the importance of his or her privacy settings on social media sites and when it’s appropriate to share information and photos – also what information shouldn’t be shared, e.g. address, complete birthdate, etc.
- Don’t carry around your child’s social security card or his or her number. Keep his or her card in a safe place. Just like your social security number – memorize it and have your child memorize it.
- Make sure you fully understand how your child’s information is being used at school. Read notices explaining your rights under the Family Educational Rights and Privacy Act, including the option to not have your child’s information released to third parties.
- Check your child’s credit report close to his or her 16th birthday or earlier if you suspect a problem. You can check this once a year for free.
- If you determine that your child’s personal information has been compromised, immediately contact the three credit bureaus and follow their instructions for resolving the problem. File a report with the FTC and consider filing one with the police if the theft involves your child’s medical or tax records. Finally, contact every company where your child’s information was misused. Ask these companies to close the fraudulent account and flag it to show it resulted from identity theft.
Important numbers to keep on hand:
Equifax – 1-866-493-9788
Experian – 1-888-397-3742
TransUnion – 1-800-680-7289
Federal Trade Commission (FTC) – 1-877-438-4338
Every year the holidays seem to begin earlier and earlier. Both Walmart and Target started bringing out their Christmas decorations and merchandise before the Halloween candy was even off the shelves.
Not only have the holidays been thrust upon us sooner, but they’re also getting more expensive each year as well. Yes, the holiday season is a time of giving, however, it’s important to remember that we can’t give more than we have. We’ve let the Black Fridays, Cyber Mondays and all the one-night-only, anxiety-inducing sales get the better of us. After all, who wants to pass up a good deal…right?
But as many families continue to struggle financially with today’s tightening economy, getting a good deal is smart, but getting carried away, allowing our credit card balances to balloon, is not. If we set a strict budget and stick to it – not being naughty but nice – we can get gifts for everyone on our shopping list while avoiding the after-the-holiday blues of falling into debt.
Here are some helpful tips to ensure that all of our holidays are “oh so merry:”
1. Make a budget – Yes, just like everything else in our lives that involves money; we must create a budget. We need to come up with a realistic amount of money we can spend. No, this isn’t the amount of money we can afford to charge on our credit cards and pay off in increments by next year’s holidays. This is the amount we can spend in cash and still be able to afford the holiday dinner with all the trimmings.
2. Make a List and check it twice – Before we head out the door or get on our computer, we need to make our list of the people we plan to buy gifts for this year. Like grocery shopping, having a prepared list will keep us on financial target and keep us from impulse buying. We must prioritize our list – family, friends, tithes, teachers, etc. We must determine an amount we plan to allot to each of the people on our list and then make sure the total dollar amount equals our budgeted figure. If we are over budget, we must – as difficult as it seems – remove people from our list or spend less on each person. WE MUST STAY WITHIN OUR BUDGET!
3. Pay Cash – We must avoid the temptation to use debit or credit cards. We typically spend 12-18% more money when we use our credit cards. If we are going to the store; we should bring cash. If we are going to use the Internet, a debit card is better than a credit card, but the best way to stay within our means is to use a prepaid card.
4. Be creative – People love getting gifts that are homemade and come from the heart. We can make pies, cookies, jellies, etc., and wrap them up festively to give to friends, teachers, co-workers, etc. We can give the gift of time – make coupons for a nice dinner for someone, babysitting – take care of friends’ children so they can have a nice evening out. This is a great gift idea for dads/husbands – give wives a coupon for a day all to themselves.
5. Be a savvy shopper- Look for coupons, clearances and sales. Shop early – avoid those last minute anxiety driven impulse buys.
6. Be honest – If we are going through tough financial times – lost our job, pay cut, etc. we need to let our family and friends know that money is tight for us this year. Sharing the holidays together is the best gift of all.
Whether we’re ready or not, the holiday season is upon us once again. Let’s not make it one that leaves us disheartened long after we’ve packed the decorations away. In the true spirit of the season, let’s make it about having fun, spending time with our family and friends and making lifelong memories.
Happy holidays from our Intracoastal family to yours!
Although we Floridians are continuing to experience muggy, summer-like days, most other areas of the country are meandering into one of the most beautiful seasons of the year – fall.
Even though I’ve lived in Florida for over twenty years, having grown up in New York, fall remains the season I miss most. Oh sure, northern Florida gets a taste of fall, but it is quite dull in comparison to the vibrant, rich colors observed by our colder states.
One of the many benefits of living in central to northern Florida – other than the fact it doesn’t snow or more accurately, accumulate snow here – is our close proximity to the true fall – the kind all of us more northern transplants fondly remember and often yearn for each year around this time.
A recent Southern Living article I came across listed the best places in the south for experiencing the radiant colors of fall. I thought I’d share a few with you which are fairly close to home.
So, before this incredible color-packed foliage disappears (peak season is usually the second and third week of October), pack a bag, gas up the car and take a delightfully unexpected trip and celebrate the true colors of fall!
Enjoy your trip and tell me all about it when you return!
1. Ellijay, GA
Ellijay is located on the edge of the Chattahoochee National Forest, about 80 miles north of Atlanta. This town and surrounding Gilmer County are known for being the apple capitol of Georgia, claiming 10 pick-your-own apples orchards.
2. Bernheim Arboretum and Research Forest, Clermont, KY
This forest is located just south of Louisville in Clermont. It includes 14,000 acres of fields and forests and 35 miles of hiking trails. For the biking enthusiast, there is a bike route that winds along the beautifully fall-colored Long Lick Creek.
3. Hanging Rock State Park, Danbury, NC
This state 7, 024 acre park, which boasts some of the best colors of fall in North Carolina, is approximately 30 miles north of Winston-Salem. You will find mountains rising more than 2,500 ft., cascading waterfalls and more!
4. Lover’s Leap Loop Trail, Hot Springs, NC
The Lover’s Leap Loop Trail overlooks the French Broad River and the town of Hot Springs, North Carolina. A hiker’s heaven – offering 1.6 mile miles of the Appalachian Trail. With its panoramic views of the Blue Ridge Mountains, you won’t want to miss this!
5. Mountain National Park, Gatlinburg, TN
This most visited national park offers acres of fall colors and incredible wildlife to include white-tailed deer, wild turkeys and black bears. This park spreads across 800 acres of the southern Appalachian Mountains, winding through Tennessee and North Carolina.
6. Natchez Trace Parkway, TN
The Natchez Trace Parkway runs through Tennessee, Alabama, and Mississippi. It connects the cities of Nashville, Tennessee and Natchez, Mississippi. Approximately 100 miles of this parkway runs through Tennessee and passes through such towns as Leipers Fork, and several historic spots.
As the lazy days of summer begin to wane, many parents are facing the overwhelming task of preparing their first child for college. Gearing up your first-time college student with the necessary supplies for dormitory life is a significant part of this preparatory process. Appointing your child’s first home away from home can seem particularly daunting. With the faithful assistance of Google, I sifted through the seemingly infinite articles, topics ranging from saving for college to dealing with being an empty nester, and compiled some great advice from parents who’ve “been there, done that” and survived to tell their stories. Hopefully, these tips will guide you, somewhat painlessly – a few bouts of tears, sadness and momentary nervous breakdowns are be expected, through this life-altering endeavor, accomplishing the feat both efficiently and cost effectively, ultimately creating a memorable rite of passage for you and your child.
Must-haves for your Freshman College Student
1. A small refrigerator and microwave –
Even if your child is on the meal plan, there will times when he or she will want to sleep in or just have the convenience of eating in the dorm.
2. Linens and Towels –
Dorm mattresses are covered with a plastic waterproof material – you will want to purchase a mattress cover for comfort. You will need a full set of twin sheets, including pillowcase, and of course, a pillow and a comforter. You may want to buy two sets of sheets to alternate between washings. Note: Look for dorm/college length sheets (usually found at Target and Bed, Bath and Beyond) because a college bed is longer than a traditional twin bed. Towels – three large bath towels and three washcloths or a bath sponge are recommended.
3. Storage Bins –
Find ones that will fit under the bed to allow more space.
4. First Aid Kit –
In addition to necessary over-the-counter medicines (e.g. aspirin, cold medications, etc.) and required medications, you will want a first aid kit containing bandages, antibiotic ointment and other basics.
5. Laundry detergent and quarters –
Dorms are equipped with commercial washers and dryers, requiring quarters and your own laundry supplies.
6. Night Light –
Courtesy goes a long way to a lasting friendly roommate relationship – your child won’t annoy his or her sleeping roommate by turning on a bright light when he or she comes in late.
7. Memorabilia -
Your child may never admit to being homesick. Either way, bring a piece of home – a framed family picture is perfect.
8. Shower Caddy –
Fill it with shampoo, conditioner, soap, razor, shaving cream, etc.
9. Power Strip –
Dorms don’t have enough outlets to keep up with the electronic demands of today’s kids.
10. A debit card –
If your child hasn’t opened a checking account yet, it’s time to do so.* Make sure to order a debit card for the account. The debit card will come in handy for all of his or her ancillary needs (e.g. groceries, school supplies, an occasional night out, etc.). A debit card is safer than cash, there’s no waiting for checks to clear, it provides more accountability than a credit card, and with online management there is immediate access to the account balance.
*Stop by our branch and one of our courteous team members will be happy to assist with this.
Okay, before you hit the aisles of your favorite discount store or begin filling the shopping cart on your most frequently visited house ware internet site, step back, take a deep, cleansing breath and utilize what’s remaining of your common sense. Today’s freshmen have access to a tool we didn’t have when our parents packed up the wood paneled family station wagon and carted us off to college – the Internet. They can gain valuable information about each other by connecting on Facebook; their likes and dislikes as well as what kind of supplies and furniture each person is bringing. Although, the element of surprise is gone, the potential for duplication is eliminated, allowing the parents to divide and conquer the communal wares still outstanding.
Before you can blink your weary, occasionally tearful eyes, the momentous day will arrive. You’ll check and recheck your to-dos, must-haves and the various can’t live with outs, pack the car and set the GPS; destination, Collegetown, USA. As you head down the highway, trying to collect your thoughts and maintain composure, remember one very important thing – parenting doesn’t end….ever. You’re just suiting up for the next phase of life with your child. Who knows, when all is said and done, you just might end up being best friends!
Corporate Volunteerism: A Win Win Win
Today, the true measure of a corporation’s success is more than the bottom line and the value of the company to its stockholders. Corporate citizenship is an integral part of a company’s success. Some essential business practices of corporate citizenship include treating employees well, practicing good ethics, being transparent and accountable, building trust and relationships, and contributing to a sustainable environment (Hitachi Foundation & Boston College Center for Corporate Citizenship, 2003). However, one of the most critical components of corporate citizenship today is volunteerism; the involvement and positive social impact that the corporation and their employees have on the community where they work. More and more, today’s successful businesses realize that their profitability, reputation and retention of quality employees have a strong correlation to their commitment to employee volunteer programs.
At Intracoastal Bank, we understand and stress the importance of giving back to our community. By providing our employees with an opportunity to do good deeds that they don’t have time for outside of work, we increase company loyalty and develop strong and lasting ties to our community. At the end of the day, our company, our employees and our community reap the benefits of our continued dedication to volunteerism.
Intracoastal Bank’s support of employee volunteerism has several benefits to us as a company. It has grown our relationship with the community who has helped make us successful. A by-product of this valued relationship is the enhancement of our corporate image and reputation. Additionally, our support and direct involvement in various not for profit projects over the past several years; the United Way of Volusia/Flagler Counties, Habitat for Humanity, Mobile Benefits, Feed Flagler, Flagler County Education Foundation, etc., has built an extremely cohesive and motivated workforce. We’ve become a unified team!
For our employees, the involvement in community volunteer programs has many perks. Volunteerism offers our employees the opportunity to improve the community where they work and live. Also, the ability to participate in the bank’s supported programs adds variety and fulfillment to their work day. In addition and quite possibly most importantly, the active engagement of our employees in these volunteer programs has improved their leadership and interpersonal skills and increased their sense of self worth. We truly have more effective and better-rounded employees because of it!
Intracoastal Bank’s unwavering support and involvement in community-based volunteer efforts positively impacts our hometown as well. Our efforts have increased the understanding of the necessity of a strong and enduring relationship between businesses and the not for profit sector in the vitality of our community. Our employees also are providing their skills and talents to needed community services that might not otherwise be possible. Lastly, our bank’s efforts assist in enhancing the quality of life in our community.