FAQ- Transaction Account Guarantee Program (TAGP)

What is the Transaction Account Guarantee Program (TAGP)?

On October 14, 2008, the FDIC announced its new Transaction Account Guarantee Program as part of the Temporary Liquidity Guarantee Program.

The voluntary Transaction Account Guarantee Program guarantees full deposit insurance coverage of noninterest-bearing transaction accounts, regardless of the dollar amount. All FDIC-insured institutions, including Premier Bank, were automatically enrolled for a 30-day evaluation period. We decided to continue our participation in this program after the initial period ended on November 14, 2008.

What are noninterest-bearing transaction accounts?

Typically noninterest-bearing transaction accounts are any demand deposit accounts, such as personal or business checking accounts, that do not earn interest. However, the FDIC has expanded this definition to include Interest on Lawyers Trust Accounts (IOLTAs, IOTAs and IOLAs, as designated by some states).

How long will the additional FDIC coverage last?

The Transaction Account Guarantee Program (TAGP) guarantees full deposit coverage of noninterest-bearing transaction accounts, regardless of the dollar amount and is in addition to the standard FDIC insurance that was temporarily increased to $250,000 per depositor. The additional FDIC TAGP coverage will be in effect through December 31, 2010.

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

The FDIC coverage on noninterest-bearing transaction accounts is over and above the current FDIC coverage of $250,000 per depositor.

Example: If you have $25,000 in a noninterest-bearing checking account and $250,000 in a certificate of deposit, the FDIC will insure the entire $275,000.