Currently, all funds held in a noninterest-bearing transaction account at any FDIC-insured bank are fully guaranteed by the FDIC, regardless of the amount. However, barring an unexpected last-minute act of Congress, this unlimited coverage will expire at the end of the year and be replaced by traditional FDIC insurance coverage. Under such traditional coverage, each depositor[1] is only entitled to a maximum insurance amount of $250,000 at each bank at which such depositor maintains funds.[2]

Section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Section 343") instituted the current unlimited coverage, which covers all transaction accounts (such as checking accounts), so long as they do not provide for the potential payment of interest.[3] But, Section 343 only provided for such coverage from Dec. 31, 2010 until Dec. 31, 2012. Congressional efforts to amend Section 343 to extend the program picked up in recent months, however the collapse of a December 13 Senate vote to roll over the program for another two years likely ensured that the program will expire as originally scheduled.

Accordingly, beginning Jan. 1, 2013, a depositor with $1 million in a noninterest-bearing business checking account, for example, will see its FDIC insurance coverage reduced from $1 million to $250,000.