FDIC's Transaction Account Guarantee Program

     Notice of changes in Temporary FDIC Insurance Coverage for Transaction Accounts

Apple River State Bank and First Community Bank of Galena, a branch of Apple River State Bank, is participating in the FDIC’s Transaction Account Guarantee Program.  Under that program, all funds in a “noninterest-bearing transaction account” are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC’s general deposit insurance rules.

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 ("IOLTAs").  It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, money-market deposit accounts.

For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.

     What is the Transaction Account Guarantee (TAG) Program

On October 14, 2008, the FDIC announced its new Transaction Account Guarantee (TAG) Program as part of the Temporary Liquidity Guarantee Program. The TAG program guarantees full deposit insurance coverage of non-interest bearing deposit transaction accounts, regardless of the dollar amount. All FDIC-insured institutions were automatically enrolled for a 30-day period. We are pleased to announce that we will continue our participation in this program.


     How does the Transaction Account Guarantee Program affect my insurance coverage on other
     types of accounts?

The FDIC coverage on non-interest bearing deposit transaction (checking) accounts is over and above the current FDIC coverage of $250,000 per depositor.


If you have $50,000 in a non interest bearing deposit transaction (checking) account and $250,000 in a certificate of deposit (CD), the FDIC will insure the entire $300,000.

What are non interest bearing deposit transaction accounts?
Non-interest bearing deposit transaction accounts are any demand deposit accounts, such as personal or business checking accounts, that do not earn interest. There are a couple of exceptions to the “interest bearing/noninterest bearing” rule:

IOLTA accounts (Interest on Lawyers Trust Accounts). These are accounts that ARE interest bearing that are maintained by Lawyers for their clients, but the interest is not given to the attorneys, but to the State Bar Association. This money is then used to provide legal services for low income individuals. In this sense, the account is considered a non-interest bearing account.

NOW accounts (Interest Checking Accounts) that maintain an interest rate of no greater than 0.25% will also be an exception to the rule and will be completely covered by FDIC insurance.

Money Market Checking Accounts since they have are a limited transactional account, fall under the category of Savings Accounts. These accounts will be insured like all other Savings accounts.

Click here (external website, opens in a new window) to see FDIC’s insurance video.

For more information on the TAG program, please visit the FDIC website