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DEPOSIT INSURANCE WORKS - ONLY IF RULES ARE FOLLOWED

Whatever the ultimate cost of the S&L bailout to the public, Better Homes and Gardens magazine advises that individual funds should be secure, provided people stay within the federal deposit insurance limits. The government simply isn't going to renege on its promise to cover insured funds.

Still, federal deposit insurance works only if the rules are followed correctly.

Here's some advice:

The Federal Deposit Insurance Corp. ceiling of $100,000 may seem like a lot of money. But many families keep more than that in several types of cash accounts, yet like to deal with a single institution. If that's the case, follow these rules:

-Federal insurance (FDIC, FSLIC or NCUSIF) covers most, but not all, banks, S&Ls and credit unions, even state-chartered.

-Four categories of accounts can be separately insured for up to $100,000 each at the same institution - individual, or single ownership, accounts; joint accounts; testamentary-revocable trusts; irrevocable trust accounts.

-Accounts must be set up properly to be protected. Check with a banker and possibly a lawyer who is an expert on federal insurance regulations. Tip: Because S&Ls are of the most concern right now, it would be helpful to get an insurance brochure from FSLIC, Insurance Division, 1700 G St., N.W., Washington, DC 20552.