Dear Mr. Premack: I’ve put most of my retirement money into CDs and other interest bearing bank deposits. Staying within the FDIC insurance levels for a single person has been a real juggling job. If anything good came out of the bailout law, it was the increase of FDIC coverage to $250,000. What do you think about simplifying my estate by consolidating accounts into just one bank instead of three now that my deposits can all be covered in one bank? – M.B.

The deposit insurance limit has been at $100,000 per bank for many years. FDIC rules allow expanded coverage for joint accounts, for instance a joint account with you and one of your children gives $200,000 coverage. But every situation has its limits, and some people have no one trustworthy to add to their accounts. They were limited to $100,000 coverage per bank.

Thus, it is common for deposits to be scattered between several banks so that no single bank has deposits beyond the insurance limits. Many people dislike juggling accounts at multiple banks just to stay within the FDIC insurance limits.

You are pleased at the coverage increase to $250,000. However, you need to know that Congress was not as generous to depositors as you think. They did not widely publicize that the FDIC coverage increase is temporary. It expires on December 31, 2009. (But note: the insurance coverage on IRA type retirement accounts was already at $250,000 before the bailout, and does not expire when the bailout increase expires.)

As a consequence, you should not rely on the increase to rearrange your long-term non-IRA deposits. You should not consolidate your accounts into a single bank (unless you plan to reduce the deposits before the insurance retreats to $100,000). View the insurance increase as nothing more than short-term reassurance to people who had been heavily into the stock market but moved assets into cash. Before the FDIC limits retreat, those people will have to decide on a long-term safety strategy as well.

Dear Mr. Premack: My Dad died in July and left some CD's to me in a pay on death arrangement. The CD's do not mature until late 2009. Can I legally leave this money in those CD's to avoid the early withdrawal penalty? How would I handle the 1099 for tax purposes if I can leave it in? – C.W.

Certificate of Deposit are contracts between the bank and the depositor, in which the bank agrees to pay interest and the depositor agrees to leave the money untouched until a future date. But these deposit contracts have other terms as well, which usually include waiver of any penalty for early withdrawal upon the death of the depositor. So you can take the money out now without a penalty.

If the interest rate is better on these older CDs that on anything you could get today, you could leave the money alone until they mature. Ask the bank to change the CDs into your name and social security number so the 1099 will be issued to you. If they won’t, then the CDs stay in your father’s name and social security number, and for 2009 you may have to file a form 1041 tax return for his estate.