Covered banks

Q

Are bank accounts insured? If so, how? — T.B., Batavia, New York

A

They’re insured by the Federal Deposit Insurance Corp., which was created in 1933 following a rash of bank failures.

The FDIC insures checking, savings and money market accounts, and CDs for up to $250,000 per depositor at each bank or savings and loan for each account ownership category. Some institutions offer further coverage, and some don’t offer FDIC protection at all, so be sure to check.

Note that FDIC coverage doesn’t extend to stocks, bonds, mutual funds, life insurance policies, annuities and some other things your financial institution might offer. For those, ask what kinds of protections may be provided. You can learn more at FDIC.gov.

Q

Can a consumer credit counseling organization really help me get out of debt?

— P.G., Columbus, Indiana

A

It might, but tread carefully, as some can hurt more than help.

A good consumer credit counseling service may review your credit report with you and offer free guidance. If necessary, it might negotiate with your creditors for lower interest rates for you and (typically for a fee) create a debt management plan (DMP) with scheduled payments. You may be making payments to the counseling service, which then pays creditors. That can work well — but only if you follow through on the plan. It’s not a magic bullet.

Research any credit counseling outfit before engaging it. You can vet services at the Better Business Bureau (BBB. org), and you can look up service providers certified by the National Foundation for Credit Counseling at NFCC.org (or call the NFCC at 800388-2227).

The Federal Trade Commission also offers valuable tips and warnings about credit counselors at Consumer.FTC.gov.