(MONEY Magazine) – Alan Naisuler had thought his savings were insured. Naisuler, 44, a computer consultant, had $140,488 on deposit at Guaranty-First Trust of Waltham, Mass. About $47,000 was in various accounts in his name alone, and the rest was in an account in his name in trust for his mother. According to Naisuler, an officer of Guaranty-First had assured him that the CD in trust for his mother would be protected separately for as much as $100,000 by the Federal Deposit Insurance Corporation. But when Guaranty-First failed last November, Naisuler got a nasty surprise: Under FDIC rules, the account in trust did not qualify for its own $100,000 of coverage, so he was $40,488 over the limit. After the FDIC arranged to sell Guaranty-First to another bank, Naisuler got some of his money back. But he was still stuck with a hefty $13,766 loss. ''The officer who advised me had an FDIC sign on her desk,'' recalls Naisuler. ''I thought I was safe.'' Fuming over his treatment, Naisuler launched a one-man crusade to collect evidence of bank-employee ignorance of FDIC rules. Posing as a prospective depositor, he visited 79 bank and thrift branches in the Boston area and asked about the arrangement that led him to lose money: Would two accounts, one in his name and one in his name in trust for his mother, each qualify for full separate FDIC coverage? For good measure, Naisuler taped a splint on his right hand, a ruse that helped him persuade unsuspecting bankers to write down the answers they gave him. The responses didn't surprise Naisuler but should horrify the rest of us: 85% of the staffers he queried (67 out of 79) gave him the wrong answer. To make sure Naisuler's experience wasn't a fluke, a team of MONEY reporters posing as ordinary customers telephoned 273 large and small banks in 14 states and requested someone who could provide information about deposit insurance. The reporters, who used their own names but did not mention MONEY, asked five questions about deposit insurance; two of the five were extremely simple, three were more complex. Sadly enough, our results were in line with Naisuler's. A mere 33 bank representatives -- 12% of the total -- answered all five questions correctly. Only 30% knew that an account in trust for one's mother does not qualify for separate insurance. We got far more accurate answers when we quizzed the specialists at the eight regional offices of the FDIC, but shockingly, three of those eight experts offered one wrong answer, and another goofed on two. (The questions, answers and results are highlighted in the box at right and described in detail below.) As Naisuler's story shows, misinformation about deposit insurance can cost you plenty. By one estimate, 16,000 Americans will lose as much as $250 million in uninsured deposits from last year's 120 bank failures (see Editor's Notes, MONEY, January). How can you avoid becoming a victim? For accurate information about how accounts are protected, phone the FDIC in Washington at 800-934-3342 (this office got a perfect score on our test). If you'd rather not grapple with the intricate guidelines, try to follow this simple rule: Stick with FDIC-insured banks, credit unions and thrifts, and never keep more than $100,000 in one institution (though that's often unavoidable for short periods after, say, you sell a home or receive an inheritance).

Why is it so hard to get sound guidance on so basic an issue? The main problem appears to be that banks don't educate their employees. In a formal follow-up interview, a customer service representative at Citizens First National Bank in Allendale, N.J. who blew two of five questions told MONEY: ''While we learn some of the basics in customer service training, we don't get into nitpicky details.'' And a customer rep at Chemical Bank in Dix Hills, N.Y. who also gave two wrong answers added: ''We haven't had any training at all. We just go by our brochures.'' Not surprisingly, the people who went five for five had more training -- and sometimes better attitudes too. Donna McVeigh, a customer service rep at Unifirst Federal Savings in Hollywood, Fla., said her bank ''sent us to a seminar.'' McVeigh's boss, senior vice president Lorraine Lasek, said her employees must be well informed, because ''we're a small institution and people are more concerned about our financial safety.'' Jeffrey Burgman of Great American Federal in Pittsburgh offered a simpler explanation for his perfect score: ''As assistant branch manager, it's my job to know everything about branch operations.'' FDIC spokesman Alan Whitney acknowledges that confusion about coverage is ''a serious problem we have to get a handle on.'' But bank regulators do not review the training or competence of bank employees during audits. Furthermore, in a 1990 cost-cutting move, the FDIC stopped printing explanatory brochures for banks to hand out. Now, spurred by complaints from Naisuler and others, the agency is readying a letter for chief executives of the nation's 14,000 banks and thrifts urging them to ensure that their employees understand the rules. The missive will cite the Naisuler episode (without names). The agency also plans to distribute updated brochures. Meanwhile, people who lose money have little recourse. For example, in a November ruling, the U.S. Court of Appeals for the Fifth Circuit set an almost insurmountable series of hurdles for a depositor trying to recover losses that resulted from bad advice: The bank's faulty guidance must have been given in writing at the time the deposit was made; it must have been approved by the bank's board of directors; and it must have been included in the bank's official records. That draconian ruling sends a clear message: You're on your own. To help you understand some of the most important deposit insurance rules, here's a detailed look at the five questions MONEY asked in its bank survey. -- If I put money in a checking account, a savings account and a certificate of deposit at your bank, do I get $100,000 of FDIC insurance for each? No. The FDIC provides a total of $100,000 in coverage for all the accounts in your name at any one bank. Altering your name on different accounts -- by using a middle initial, for example -- does not get you separate protection. -- If I open savings accounts at two different branches of your bank, do I get $100,000 of FDIC coverage for each account? No. Accounts at different branches that fall in the same category are lumped together under one $100,000 insurance umbrella. -- If I open an account in my name and another one in my name in trust for my mother, does each get $100,000 of insurance? No. ''In trust for'' accounts, also known as revocable testamentary accounts, do qualify for separate insurance, but only when you open them for someone the FDIC defines as a ''natural object of your bounty'' -- a child, stepchild, grandchild, step- grandchild or spouse. An account in trust for anyone else -- a parent, niece or friend, for example -- is treated as just another account in your name. -- If I open a joint account with my spouse, one with my son and another with my daughter, does each account receive $100,000 of FDIC insurance? No. Joint accounts are insured separately from individual accounts but with limitations. The FDIC considers you to be the owner of half the money in your joint accounts. Also, you are insured for only up to $100,000 on the money you have in all joint accounts at any one institution. Say you had $80,000 on deposit in each of three joint accounts at the same bank -- one with your husband, one with your son and a third with your daughter. Your share of each would be $40,000, for a total of $120,000. Only $100,000 of that would be insured. Also, the FDIC treats all joint accounts owned by the same individuals at the same bank as one account. So if you and your spouse have joint checking and savings accounts, the two together are insured for only up to $100,000. You will not get separate coverage, for example, by reversing the order of the names, or by using your Social Security number on one and your spouse's on the other. -- If I have a savings account, an Individual Retirement Account and a Keogh account at your bank, does each get $100,000 in FDIC insurance? Yes, for now. But under a law that takes effect on Dec. 19, you will be limited to $100,000 total coverage for all IRAs and self-directed Keoghs at the same bank. Under a pending FDIC proposal, IRA CDs opened before that date will continue to get full separate coverage until they mature.

BOX: Our five-question test that baffled the banks

MONEY's federal deposit-insurance survey of 273 banks consisted of five questions touching on the issues that most often confuse customers -- and, alas, many bankers themselves. While almost all of the staffers were able to answer the first two rather simple questions, they fared embarrassingly worse on the tougher final three.

Question Correct answer If I put money in a checking account, a savings account and a certificate of deposit at your bank, do I get $100,000 of FDIC coverage for each?

No, and 95% said so.

If I open savings accounts at different branches of your bank, do I get $100,000 of FDIC insurance for each of the accounts?

No, and 96% said so.

If I open an account in my name and another one in my name in trust for my mother, does each account get $100,000 of insurance?

No, but only 30% said so.

If I open a joint account with my spouse, one with my son and another with my daughter, does each account have $100,000 of FDIC insurance?

No, but only 39% said so.

If I have a savings account, an IRA and a Keogh account at your bank, does each one get $100,000 in FDIC insurance?

Yes, but only 58% said so.

BOX:

Strapped, the FDIC stopped sending brochures to banks.