FDIC: Your Insured Deposits (2024)

Important Information about this Brochure

Your Insured Deposits is a comprehensive description of FDIC deposit insurance coverage for the mostcommon account ownership categories. This brochure is not intended as a legal interpretation of the FDIC'slaws and regulations. For additional or more specific information about FDIC insurance coverage, consult theFederal Deposit Insurance Act (12 U.S.C.1811 et seq.) and the FDIC's regulations relating to insurancecoverage described in 12 C.F.R. Part 330.

The information in this brochure is based on FDIC laws and regulations in effect at publication. These rulescan be amended and, therefore, some of the information in this brochure may become outdated. The onlineversion of this brochure, available on the FDIC's website at www.fdic.gov/deposit/deposits, will be updated immediately if rule changesaffecting FDIC insurance coverage are made.

Depositors should note that federal law expressly limits the amount of insurance the FDIC can pay todepositors when an insured bank fails, and no representation made by any person or organization can eitherincrease or modify that amount.

This brochure is not intended to provide estate planning advice. Depositors seeking such assistance shouldcontact a financial or legal advisor.

For simplicity, this brochure uses the term "insured bank" to mean any bank or savings association that isinsured by the FDIC. To check whether the FDIC insures a specific bank or savings association:

• Call the FDIC toll-free: 1-877-275-3342
• Use FDIC's "Bank Find" at: https://banks.data.fdic.gov/bankfind-suite/bankfind
• Look for the FDIC sign where deposits are received

What is the FDIC?

The FDIC—short for the Federal Deposit Insurance Corporation—is an independent agency of theUnited States government. The FDIC protects depositors of insured banks located in the United States againstthe loss of their deposits if an insured bank fails.

Any person or entity can have FDIC insurance coverage in an insured bank. A person does not have to be a U.S.citizen or resident to have his or her deposits insured by the FDIC.

FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC beganoperations in 1934, no depositor has ever lost a penny of FDIC-insured deposits.

FDIC Coverage Basics

FDIC insurance covers depositors' accounts at each insured bank, dollar-for-dollar, including principal andany accrued interest through the date of the insured bank's closing, up to the insurance limit.

FDIC insurance covers all types of deposits received at an insured bank but does not cover investments, evenif they were purchased at an insured bank.

What the FDIC Covers

• Checking accounts
• Negotiable Order of Withdrawal (NOW) accounts
• Savings accounts
• Money market deposit accounts (MMDA)
• Time deposits such as certificates of deposit (CDs)
• Cashier's checks, money orders, and other official items issued by a bank

What the FDIC Does Not Cover

• Stock investments
• Bond investments
• Mutual funds
• Life insurance policies
• Annuities
• Municipal securities
• Safe deposit boxes or their contents
• U.S. Treasury bills, bonds or notes*

*These investments are backed by the full faith and credit of the U.S. government.

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each accountownership category.

The FDIC insures deposits that a person holds in one insured bank separately from any deposits that theperson owns in another separately chartered insured bank. For example, if a person has a certificate ofdeposit at Bank A and has a certificate of deposit at Bank B, the amounts would each be insured separatelyup to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured.

The FDIC provides separate insurance coverage for funds depositors may have in different categories of legalownership. The FDIC refers to these different categories as "ownership categories." This means that a bankcustomer who has multiple accounts may qualify for more than $250,000 in insurance coverage if thecustomer's funds are deposited in different ownership categories and the requirements for each ownershipcategory are met.

Ownership Categories

This section describes the following FDIC ownership categories and the requirements a depositor must meet toqualify for insurance coverage above $250,000 at one insured bank.

• Single Accounts
• Certain Retirement Accounts
• Joint Accounts
• Revocable Trust Accounts
• Irrevocable Trust Accounts
• Employee Benefit Plan Accounts
• Corporation/Partnership/Unincorporated Association Accounts
• Government Accounts

Single Accounts

A single account is a deposit owned by one person. This ownership category includes:

• An account held in one person's name only, provided the owner has not designated any beneficiary (ies)who are entitled to receive the funds when the account owner dies
• An account established for one person by an agent, nominee, guardian, custodian, or conservator,including Uniform Transfers to Minors Act accounts, escrow accounts and brokered deposit accounts
• An account held in the name of a business that is a sole proprietorship (for example, a "Doing BusinessAs" or DBA account)
• An account established for or representing a deceased person's funds—commonly known as adecedent's estate account
• An account that fails to qualify for separate coverage under another ownership category

If an account title identifies only one owner, but another person has the right to withdraw funds from theaccount (e.g., as Power of Attorney or custodian), the FDIC will insure the account as a single ownershipaccount.

The FDIC adds together all single accounts owned by the same person at the same bank and insures the totalup to $250,000.

Note on Beneficiaries: If the owner of a single account has designated one or more beneficiarieswho will receive the deposit when the account owner dies, the account would be insured as a revocable trustaccount.

Example 1: Single Account

Explanation

Marci Jones has four single accounts at the same insured bank, including one account in the name of herbusiness, which is a sole proprietorship. The FDIC insures deposits owned by a sole proprietorship as thesingle account of the business owner. The FDIC combines the four accounts, which equal $260,000, and insuresthe total balance up to $250,000, leaving $10,000 uninsured.

Certain Retirement Accounts

A retirement account is insured under the Certain Retirement Accounts ownership category only if the accountqualifies as one of the following:

• Individual Retirement Account (IRA):
  • Traditional IRA
  • Roth IRA
  • Simplified Employee Pension (SEP) IRA
  • Savings Incentive Match Plans for Employees (SIMPLE) IRA
• Self-directed defined contribution plan account includes
  • Self-directed 401(k) plan
  • Self-directed SIMPLE IRA held in the form of a 401(k) plan
  • Self-directed defined contribution profit-sharing plan
• Self-directed Keogh plan account (or H.R.10 plan account) designed for self-employed individuals
• Section 457 deferred compensation plan account, such as an eligible deferred compensation plan providedby state and local governments regardless of whether the plan is self-directed

The FDIC adds together all retirement accounts listed above owned by the same person at the same insuredbank and insures the total amount up to $250,000.

The FDIC defines the term "self-directed" to mean that plan participants have the right to direct how themoney is invested, including the ability to direct that deposits be placed at an FDIC-insured bank.

The FDIC will consider an account to be self-directed if the participant of the retirement plan has the rightto choose a particular bank's deposit accounts as an investment option. For example:

• If a plan has deposit accounts at a particular insured bank as its default investment option, then theFDIC would deem the plan to be self-directed for insurance coverage purposes because, by inaction, theparticipant has directed the placement of such deposits
• If a plan consists only of a single employer/employee, and the employer establishes the plan with asingle investment option of deposit accounts at a particular insured bank, then the plan would beconsidered self-directed for insurance coverage purposes

The following types of deposits do not qualify as Certain Retirement Accounts:

• A plan for which the only investment vehicle is the deposit accounts of a particular bank, so thatparticipants have no choice of investments
• Deposit accounts established under section 403(b) of the Internal Revenue Code (annuity contracts forcertain employees of public schools, tax-exempt organizations and ministers), which are insured asEmployee Benefit Plan accounts
• Defined-benefit plan deposits (plans for which the benefits are determined by an employee'scompensation, years of service and age), which are insured as Employee Benefit Plan accounts
• Defined contribution plans that are not self-directed, which are insured as Employee Benefit PlanAccounts
• Coverdell Education Savings Accounts (formerly known as Education IRAs), Health Savings Accounts orMedical Savings Accounts (see the section on Unique Ownership Situations for guidance on the depositinsurance coverage)

Note on Beneficiaries: While some self-directed retirement Accounts, like IRAs, permit the ownerto name one or more beneficiaries, the existence of beneficiaries does not increase the available insurancecoverage.

Example 2: Certain Retirement Accounts

Explanation

Bob Johnson has two different types of retirement accounts that qualify as Certain Retirement Accounts at thesame insured bank. The FDIC adds together the deposits in both accounts, which equal $185,000. Since Bob'stotal in all certain retirement accounts at the same bank is less than $250,000, his IRA deposits are fullyinsured.

Joint Accounts

A joint account is a deposit owned by two or more people. FDIC insurance covers joint accounts owned in anymanner conforming to applicable state law, such as joint tenants with right of survivorship, tenants by theentirety and tenants in common.

To qualify for insurance coverage under this ownership category, all of the following requirements must bemet:

1. All co-owners must be living people. Legal entities such as corporations, trusts, estates orpartnerships are not eligible for joint account coverage.
2. All co-owners must have equal rights to withdraw deposits from the account. For example, if one co-ownercan withdraw deposits on his or her signature alone but the other co-owner can withdraw deposits onlywith the signature of both co-owners, the co-owners would not have equal withdrawal rights.
3. All co-owners must sign the deposit account signature card unless the account is a CD or is establishedby an agent, nominee, guardian, custodian, executor or conservator.

If all of these requirements are met, each co-owner's shares of every joint account that he or she owns atthe same insured bank are added together and the total is insured up to $250,000.

The FDIC assumes that all co-owners' shares are equal unless the deposit account records state otherwise.

The balance of a joint account can exceed $250,000 and still be fully insured. For example, if the same twoco-owners jointly own both a $350,000 CD and a $150,000 savings account at the same insured bank, the twoaccounts would be added together and insured up to $500,000, providing up to $250,000 in insurance coveragefor each co-owner. This example assumes that the two co-owners have no other joint accounts at the bank.

There is no kinship requirement for joint account coverage. Any two or more people that co-own funds canqualify for insurance coverage in the joint account ownership category provided the requirements listedabove are met.

Insurance coverage of joint accounts is not increased by rearranging the owners' names or Social Securitynumbers or changing the styling of their names. Alternating the use of "or," "and" or "and/or" to separatethe names of co-owners in a joint account title also does not affect the amount of insurance coverageprovided.

Note on Beneficiaries: If the co-owners of a jointly held account have designated one or morebeneficiaries who will receive the deposit when the co-owners die, the account would be insured as arevocable trust account.

Example 3: Joint Accounts

Insurance Coverage for Each Owner is Calculated as Follows:

Explanation

• The total amount in each joint account is divided by the number of co-owners.
• Mary's ownership share in all joint accounts equals 1/2 of the MMDA account ($115,000), 1/2 of thesavings account ($150,000), and 1/3 of the CD ($90,000), for a total of $355,000. Since her coverage inthe joint account ownership category is limited to $250,000, $105,000 is uninsured.
• John's ownership share in all joint accounts is the same as Mary's, so $105,000 of John's deposits isuninsured.
• Robert's ownership share in all joint accounts equals 1/3 of the CD, or $90,000, so his share is fullyinsured.

Revocable Trust Accounts

This section explains FDIC insurance coverage for revocable trust accounts, and is not intended as estateplanning advice or guidance. Depositors should contact a legal or financial advisor for assistance withestate planning.

A revocable trust account is a deposit account owned by one or more people that identifies one or morebeneficiaries who will receive the deposits upon the death of the owner(s). A revocable trust can berevoked, terminated or changed at any time, at the discretion of the owner(s). In this section, the term"owner" means the grantor, settlor, or trustor of the revocable trust.

When calculating deposit insurance coverage, the designation of trustees, co-trustees and successor trusteesis not relevant. They are administrators and are not considered in calculating deposit insurance coverage.

This ownership category includes both informal and formal revocable trusts:

• Informal revocable trusts—often called payable on death, Totten trust, in trustfor, or as trustee for accounts—are created when the account owner signs an agreement, usuallypart of the bank's signature card, directing the bank to transfer the funds in the account to one ormore named beneficiaries upon the owner's death.
• Formal revocable trusts—known as living or family trusts—are written trustscreated for estate planning purposes. The owner controls the deposits and other assets in the trustduring his or her lifetime. The agreement establishes that the deposits are to be paid to one or moreidentified beneficiaries upon the owner's death. The trust generally becomes irrevocable upon theowner's death.

Coverage and Requirements for Revocable Trust Accounts

In general, the owner of a revocable trust account is insured up to $250,000 for each unique beneficiary, ifall of the following requirements are met:

1. The account title at the bank must indicate that the account is held pursuant to a trust relationship.This rule can be met by using the terms payable on death (or POD), in trust for (or ITF), as trustee for(or ATF), living trust, family trust, or any similar language, including simply having the word "trust"in the account title. The account title includes information contained in the bank's electronic depositaccount records.
2. The beneficiaries must be named in either the deposit account records of the bank (for informalrevocable trusts) or identified in the formal revocable trust document. For a formal trust agreement, itis acceptable for the trust to use language such as "my issue" or other commonly used legal terms todescribe the designated beneficiaries, provided the specific names and number of eligible beneficiariescan be determined.
3. To qualify as an eligible beneficiary, the beneficiary must be a living person, a charity or anon-profit organization. If a charity or non-profit organization is named as beneficiary, it mustqualify as such under Internal Revenue Service (IRS) regulations.

An account must meet all of the above requirements to be insured under the revocable trust ownershipcategory. Typically, if any of the above requirements are not met, the entire amount in the account, or theportion of the account that does not qualify, is added to the owner's other single accounts, if any, at thesame bank and insured up to $250,000. If the trust has multiple co-owners, each owner's share of thenon-qualifying amount would be treated as his or her single ownership account.

Insurance coverage for revocable trust accounts is calculated differently depending on the number ofbeneficiaries named by the owner, the beneficiaries' interests and the amount of the deposit.

Two calculation methods are used to determine insurance coverage of revocable trust accounts: one method isused only when a revocable trust owner has five or fewer unique beneficiaries; the other method is used onlywhen an owner has six or more unique beneficiaries.

If a trust has more than one owner, each owner's insurance coverage is calculated separately.

Revocable Trust Insurance Coverage - Five or Fewer Unique Beneficiaries

When a revocable trust owner names five or fewer beneficiaries, the owner's trust deposits are insured up to$250,000 for each unique beneficiary.

This rule applies to the combined interests of all beneficiaries the owner has named in all formal andinformal revocable trust accounts at the same bank. When there are five or fewer beneficiaries, maximumdeposit insurance coverage for each trust owner is determined by multiplying $250,000 times the number ofunique beneficiaries, regardless of the dollar amount or percentage allotted to each unique beneficiary.Therefore, a revocable trust with five unique beneficiaries is insured up to $1,250,000.

Maximum Insurance Coverage for a Trust Owner when there are Five or Fewer Unique Beneficiaries:

Example 4: POD Accounts for One Owner when there are Five or Fewer Unique Beneficiaries

Explanation

John Jones has three revocable trust accounts at the same insured bank. For each of these accounts, John hasnamed the same two unique beneficiaries. Maximum insurance coverage for these accounts is calculated as$250,000 times two beneficiaries, which equals $500,000. John Jones is fully insured.

Example 5: Multiple Revocable Trust Accounts with Five or Fewer Unique Beneficiaries

Explanation

When a revocable trust owner names five or fewer beneficiaries, the owner's share of each trust account isadded together and the owner receives up to $250,000 in insurance coverage for each unique beneficiary.

• Paul's share: $350,000 (50% of Account 1)
• Lisa's share: $800,000 (50% of Account 1 and 100% of Account 2)

Because Paul named two unique beneficiaries, his maximum insurance coverage is $500,000 ($250,000 times twobeneficiaries). Since his share of Account 1- $350,000 - is less than $500,000, he is fully insured.

Because Lisa has named three unique beneficiaries between Accounts 1 and 2, her maximum insurance coverage is$750,000 ($250,000 times three beneficiaries). Since her share of both accounts - $800,000 – exceeds$750,000, she is uninsured for $50,000.

Revocable Trust Insurance Coverage - Six or More Unique Beneficiaries

Equal Beneficial Interests

When a revocable trust owner names six or more unique beneficiaries, and all the beneficiaries have an equalinterest in the trust (i.e., every beneficiary receives exactly the same amount), the insurance calculationis the same as for revocable trusts that name five or fewer beneficiaries. The trust owner receivesinsurance coverage up to $250,000 for each unique beneficiary. As shown below, with one owner and sixbeneficiaries, with equal beneficial interests, the owner's maximum insurance coverage is up to $1,500,000.

Maximum Insurance Coverage for Each Revocable Trust Owner when there are Six or More Unique Beneficiarieswith Equal Beneficial Interests:

Unequal Beneficial Interests

When a revocable trust owner names six or more beneficiaries and the beneficiaries do not have equalbeneficial interests (i.e., they receive different amounts), the owner's revocable trust deposits areinsured for the greater of either: (1) the sum of each beneficiary's actual interest in the revocable trustdeposits up to $250,000 for each unique beneficiary, or (2) a minimum coverage amount of $1,250,000.

Determining insurance coverage of a revocable trust that has six or more unique beneficiaries whose interestsare unequal can be complex. For information on coverage beyond the minimum coverage amount of $1,250,000 perowner, please contact the FDIC for assistance using the contact information at the end of this brochure.

Irrevocable Trust Accounts

Irrevocable trust accounts are deposit accounts held in connection with a trust established by statute or awritten trust agreement in which the owner (also referred to as a grantor, settlor or trustor) contributesdeposits or other property to the trust and gives up all power to cancel or change the trust. An irrevocabletrust also may come into existence upon the death of an owner of a revocable trust.

A revocable trust account that becomes an irrevocable trust account due to the death of the trust owner maycontinue to be insured under the rules for revocable trusts. Therefore, in such cases, the rules in therevocable trust section may be used to determine coverage.

The interests of a beneficiary in all deposit accounts under an irrevocable trust established by the samesettlor and held at the same insured bank are added together and insured up to $250,000, only if all of thefollowing requirements are met:

• The trust must be valid under state law
• The insured bank's deposit account records must disclose the existence of the trust relationship
• The beneficiaries and their interests in the trust must be identifiable from the bank's deposit accountrecords or from the trustee's records
• The amount of each beneficiary's interest must not be contingent as defined by FDIC regulations

If the owner retains an interest in the trust, then the amount of the owner's retained interest would beadded to the owner's other single accounts, if any, at the same insured bank and the total insured up to$250,000.

For example, if the grantor of an irrevocable trust is still living, and the trust provides that trust assetscan either be used by the grantor or by a trustee on behalf of the grantor, the grantor would be deemed tohave a retained interest. Thus, this irrevocable trust account would not be insured under the irrevocabletrust ownership category, but as a single ownership deposit of the grantor. The balance of the account wouldbe added together with any other single ownership accounts the grantor has at the same bank, and the totalwould be insured up to $250,000.

Employee Benefit Plan Accounts

An employee benefit plan account is a deposit of a pension plan, defined benefit plan or other employeebenefit plan that is not self-directed. An account insured under this category must meet the definition ofan employee benefit plan in section 3(3) of the Employee Retirement Income Security Act (ERISA) of 1974,with the exception of plans that qualify under the Certain Retirement Account ownership category. The FDICdoes not insure the plan itself, but insures the deposit accounts owned by the plan.

Additional requirements for coverage:

• The investment and management decisions relating to the account must be controlled by a planadministrator (not self-directed by the participant).
• The plan administrator must maintain documentation supporting the plan and the beneficial interest ofthe participants
• The account must be properly titled as an employee benefit account with the bank
  • When all of these requirements are met, the FDIC will insure each participant's interest in theplan up to $250,000, separately from any accounts the employer or employee may have in the sameFDIC insured institution. The FDIC often refers to this coverage as "pass-through coverage"because the insurance coverage passes through the employer (agent) that established the accountto the employee who is considered the owner of the funds.

Even when plans qualify for pass-through coverage, insurance coverage cannot be determined simply bymultiplying the number of participants by $250,000 because plan participants frequently have differentinterests in the plan.

To determine the maximum amount a plan can have on deposit in a single bank and remain fully insured, theplan administrator must first identify the participant who has the largest share of the plan assets, andcalculate the participant's share as a percentage of overall plan assets. Then, the plan administrator mustdivide $250,000 by that percentage to arrive at the maximum fully insured amount that a plan can have ondeposit at one bank.

Example 6: Employee Benefit Plan that Qualifies for Pass-Through Coverage

The Happy Pet Vet Clinic has a profit-sharing plan for its employees

Explanation

This employee benefit plan's $700,000 deposit is fully insured. Because Dr. Todd's share of the $700,000deposit (35% of $700,000 = $245,000) is less than $250,000, and all of the other participants' shares of thedeposit also are less than $250,000, the entire deposit is insured.

To determine the maximum amount this employee benefit plan can deposit at one bank and ensure all of thefunds are fully covered, $250,000 should be divided by the percentage share of the plan participant with thelargest interest in the plan. In this example, the maximum fully insured balance for this plan is $714,285.This amount is calculated as follows: $250,000 divided by 35% or 0.35 = $714,285.

Plan participants who want to know more about how an employee benefit plan's deposits are insured shouldconsult with the plan administrator.

Corporation/Partnership/Unincorporated Association Accounts

Deposits owned by corporations, partnerships, and unincorporated associations, including for-profit andnot-for-profit organizations, are insured under the same ownership category. Such deposits are insuredseparately from the personal deposits of the organization's owners, stockholders, partners or members.

Unincorporated associations typically insured under this category include churches and other religiousorganizations, community and civic organizations and social clubs.

To qualify for insurance coverage under this ownership category, a corporation, partnership or unincorporatedassociation must be engaged in an "independent activity," meaning that the entity is operated primarily forsome purpose other than to increase deposit insurance coverage.

All deposits owned by a corporation, partnership, or unincorporated association at the same bank arecombined and insured up to $250,000.

Accounts owned by the same corporation, partnership, or unincorporated association but designated fordifferent purposes are not separately insured.

For example: If a corporation has both an operating account and a reserve account at the same bank, the FDICwould add both accounts together and insure the deposits up to $250,000. Similarly, if a corporation hasdivisions or units that are not separately incorporated, the FDIC would combine the deposit accounts ofthose divisions or units with any other deposit accounts of the corporation at the bank and the total wouldbe insured up to $250,000.

The number of partners, members, stockholders or account signatories established by a corporation,partnership or unincorporated association does not affect insurance coverage.

For example: The FDIC insures deposits owned by a homeowners' association at one insured bank up to $250,000in total, not $250,000 for each member of the association.

Government Accounts

The category known as government accounts (also called Public Unit accounts) includes deposit accounts ownedby:

• The United States, including federal agencies
• Any state, county, municipality (or a political subdivision of any state, county or municipality), theDistrict of Columbia, Puerto Rico and other government possessions and territories
• An Indian tribe

Insurance coverage of a government account is unique in that the insurance coverage extends to the officialcustodian of the deposits belonging to the government or public unit, rather than to the government unitit*elf.

Accounts held by an official custodian of a government unit will be insured as follows:

In-state accounts:

• Up to $250,000 for the combined amount of all time and savings accounts (including NOWaccounts)
• Up to $250,000 for the combined amount of all interest-bearing and noninterest-bearing demand depositaccounts (since July 21, 2011, banks have been allowed to pay interest on demand deposit accounts)

Out-of-state accounts:

• Up to $250,000 for the combined amount of all deposit accounts

Putting It All Together: Using Multiple Ownership Categories

The FDIC provides separate insurance coverage for a depositor's funds at the same insured bank if thedeposits are held in different ownership categories. To qualify for this expanded coverage, the requirementsfor insurance coverage in each ownership category must be met.

The example on the next page illustrates how a husband and wife with three children could qualify for up to$3,500,000 in FDIC coverage at one insured bank. This example assumes that the funds are in qualifieddeposit products at an insured bank and these are the only accounts that the family has at the bank.

Note: This example is intended solely to describe the use of different account ownershipcategories and not to provide estate planning advice.

Example 7: Insurance Coverage for a Husband and Wife with Deposit Accounts in Multiple Ownership Categories

Explanation

Single Account Ownership Category

The FDIC combines all single accounts owned by the same person at the same bank and insures the total up to$250,000. The Husband's single account deposits do not exceed $250,000 so his funds are fully insured. Thesame facts apply to the Wife's single account deposits. Both accounts are fully insured.

Joint Account Ownership Category

Husband and Wife have one joint account at the bank. The FDIC combines each co-owner's shares of all jointaccounts at the bank and insures each co-owner's total up to $250,000. Husband's ownership share in alljoint accounts at the bank equals 1/2 of the joint account or $250,000, so his share is fully insured.Wife's ownership share in all joint accounts at the bank equals 1/2 of the joint account or $250,000, so hershare is fully insured.

Revocable Trust Account Ownership Category

To determine insurance coverage of revocable trust accounts, the FDIC first determines the amount of thetrust's deposits belonging to each owner. In this example:

• Husband's share = $1,000,000 (100% of the Husband's POD account naming Wife as beneficiary and 50% ofthe Husband and Wife Living Trust account identifying Child 1, Child 2, and Child 3 as beneficiaries)
• Wife's share = $1,000,000 (100% of the Wife's POD account naming Husband as beneficiary and 50% of theHusband and Wife Living Trust account identifying Child 1, Child 2, and Child 3 as beneficiaries)

Second, the FDIC determines the number of beneficiaries for each owner. In this example, each owner has fourunique beneficiaries (Spouse, Child 1, Child 2 and Child 3). When a revocable trust owner names five orfewer unique beneficiaries, the owner is insured up to $250,000 for each unique beneficiary. Husband's shareof the revocable trust deposits is insured up to $1,000,000 ($250,000 times four beneficiaries =$1,000,000). Wife's share of the revocable trust deposits is insured up to $1,000,000 ($250,000 times fourbeneficiaries = $1,000,000).

Certain Retirement Account Ownership Category

The FDIC adds together all certain retirement accounts owned by the same person at the same bank and insuresthe total up to $250,000. The Husband and Wife each have an IRA deposit at the bank with a balance of$250,000. Because each account is within the insurance limit, the funds are fully insured.

Unique Ownership Scenarios

Fiduciary Accounts

What are fiduciary accounts?

Fiduciary accounts are deposit accounts owned by one party but held in a fiduciary capacity by another party.Fiduciary relationships may include, but are not limited to, an agent, nominee, guardian, executor orcustodian. Common fiduciary accounts include Uniform Transfers to Minors Act accounts, escrow accounts,Interest On Lawyer Trust Accounts and deposit accounts obtained through a broker.

What are the FDIC requirements for fiduciary accounts?

The fiduciary nature of the account must be disclosed in the bank's deposit account records (e.g., "Jane Doeas Custodian for Susie Doe" or "First Real Estate Title Company, Client Escrow Account"). The name andownership interest of each owner must be ascertainable from the deposit account records of the insured bankor from records maintained by the agent (or by some person or entity that has agreed to maintain records forthe agent).

Special disclosure rules apply to multi-tiered fiduciary relationships. If an agent pools the deposits ofseveral owners into one account and the disclosure rules are satisfied, the deposits of each owner will beinsured as that owner's deposits.

How does the FDIC insure funds deposited by a fiduciary?

Funds deposited by a fiduciary on behalf of a person or entity (the owner) are insured as the deposits of theowner if the disclosure requirements for fiduciary accounts are met.

Are funds deposited by a fiduciary insured separately from an owner's other deposit accounts at the samebank?

Funds deposited by a fiduciary on behalf of a person or entity (the owner) are added to any other depositsthe owner holds in the same ownership category at the same bank, and insured up to the applicable limit.

For Example: A broker purchases a CD for $250,000 on a customer's behalf at ABC Bank. Thecustomer already has a checking account in his or her name at ABC Bank for $15,000. The two accounts areadded together and insured up to $250,000 in the single ownership account category. Since the customer'ssingle ownership deposits total $265,000, $15,000 is uninsured.

Health Savings Accounts

What is a Health Savings Account?

A Health Savings Account (HSA) is an IRS qualified tax-exempt trust or custodial deposit that is establishedwith a qualified HSA trustee, such as an FDIC-insured bank, to pay or reimburse a depositor for certainmedical expenses.

How does the FDIC insure an HSA?

An HSA, like any other deposit, is insured based on who owns the funds and whether beneficiaries have beennamed. If a depositor opens an HSA and names beneficiaries either in the HSA agreement or in the bank'srecords, the FDIC would insure the deposit under the Revocable Trust Account ownership category. If adepositor opens an HSA and does not name any beneficiaries, the FDIC would insure the deposit under thesingle account ownership category.

How should an HSA be titled?

The identification of a deposit as an HSA, such as "John Smith's HSA," is sufficient for titling the depositto be eligible for single account or revocable trust account coverage, depending on whether eligiblebeneficiaries are named.

Mortgage Servicing Accounts

How are Mortgage Servicing Accounts Insured?

Mortgage Servicing Accounts are accounts maintained by a mortgage servicer, in a custodial or other fiduciarycapacity, which are composed of payments by mortgagors of principal and interest (P&I).

The cumulative balance paid into the account by the mortgagors is insured, with coverage provided to themortgage servicer or mortgage investor, for up to $250,000 per mortgagor (the borrower). The calculation ofcoverage for each P&I account is separate if the mortgage servicer or mortgage investor has establishedmultiple P&I accounts in the same bank.

For example, a mortgage servicer collects from 1,000 different borrowers their monthly mortgage payments of$2,000 (P&I) and places the funds into a mortgage servicing account. Is the $2,000,000 aggregate balanceof the mortgage servicer's mortgage servicing account insured?

Yes, the account is fully insured to the mortgage servicer because each mortgagor's payment of $2,000(P&I) is insured separately for up to $250,000.

Although mortgage servicers often collect and escrow tax and insurance (T&I), these accounts areseparately maintained and not considered mortgage servicing accounts for deposit insurance purposes. T&Ideposits belong to the mortgagors pending payment of their real estate taxes and/ or property insurancepremium to the taxing authority or insurance company. The T&I deposits are insured on a "pass-through"basis to each individual mortgagor.

Coverdell Education Savings Accounts

How is a Coverdell Education Savings Account insured?

A Coverdell Education Savings Account is insured as an irrevocable trust account. Although this account isoften referred to as an Education IRA, the account does not involve retirement and is therefore not insuredas a self-directed retirement account. It is an irrevocable commitment created for the purpose of payingqualified education expenses of a designated beneficiary.

Frequently Asked Questions

Bank Changes

What happens to my deposits if my bank fails?

In the unlikely event of a bank failure, the FDIC acts quickly to protect insured deposits by arranging asale to a healthy bank, or by paying depositors directly for their deposit accounts to the insured limit.

• Purchase and Assumption Transaction: This is the preferred and most common method,under which a healthy bank assumes the insured deposits of the failed bank. Insured depositors ofthe failed bank immediately become depositors of the assuming bank and have access to their insuredfunds. The assuming bank may also purchase loans and other assets of the failed bank.

  It is important for account owners to note that their deposit contract was with the failed bank andis considered void upon the failure of the bank. The assuming institution has no obligation tomaintain either the failed bank rates or terms of the account agreement. Depositors of a failedbank, however, do have the option of either setting up a new account with the acquiring institutionor withdrawing some or all of their funds without penalty.

• Deposit Payoff: When there is no open bank acquirer for the deposits, the FDIC will paythe depositor directly by check up to the insured balance in each account. Such payments usually beginwithin a few days after the bank closing.

What happens to my insurance coverage if I have deposits at two insured banks that merge?

When two or more insured banks merge, deposits from the assumed bank are separately insured from deposits atthe assuming bank for at least six months after the merger. This grace period gives a depositor theopportunity to restructure his or her accounts, if necessary.

CDs from the assumed bank are separately insured until the earliest maturity date after the end of thesix-month grace period. CDs that mature during the six-month period and are renewed for the same term and inthe same dollar amount (either with or without accrued interest) continue to be separately insured until thefirst maturity date after the six-month period. If a CD matures during the six-month grace period and isrenewed on any other basis, it would be separately insured only until the end of the six-month grace period.

Note that in situations of a bank failure where a depositor already has deposits at the acquiring bank, thesix-month grace period described would also apply to their deposits.

Death of Account Owners and Beneficiaries

What happens to insurance coverage after an account owner dies?

The FDIC insures a deceased person's accounts as if the person were still alive for six months after thedeath of the account holder. During this grace period, the insurance coverage of the owner's accounts willnot change unless the accounts are restructured by those authorized to do so. Also, the FDIC will not applythis grace period if it would result in less coverage.

How does the death of a beneficiary of an informal revocable trust (e.g., POD account) affect insurancecoverage?

There is no grace period if the beneficiary of a POD account dies. In most cases, insurance coverage for thedeposits would be reduced immediately.

For example: A mother deposits $500,000 in a POD account at an insured bank with her two children named asthe beneficiaries in the account records of the bank. While the owner and both beneficiaries are alive, theaccount is insured up to $500,000 ($250,000 times two beneficiaries = $500,000). If one beneficiary dies,insurance coverage for the mother's POD account is immediately reduced to $250,000 ($250,000 times onebeneficiary = $250,000).

How does the death of a beneficiary of a formal revocable trust affect the insurance coverage?

Like informal revocable trusts, the six-month grace period does not apply to the death of a beneficiary namedin a formal revocable trust account. However, the terms of the formal revocable trust may provide for asuccessor beneficiary or some other redistribution of the trust deposits. Depending on these terms, theinsurance coverage may or may not change.

For More Information from the FDIC

Call toll-free
1-877-ASK-FDIC (1-877-275-3342)

Hearing impaired line
1-800-925-4618

Calculate insurance coverage
Use the FDIC's online Electronic Deposit Insurance Estimator (EDIE) at: www.fdic.gov/edie

Read more about FDIC insurance online at:
www.fdic.gov/deposit/deposits

View frequently asked questions on deposit insurance coverage at:
www.fdic.gov/deposit/deposits

Order FDIC deposit insurance products online at:
https://catalog.fdic.gov/

Send questions by e-mail
Use the FDIC's online Customer Assistance Form at: https://ask.fdic.gov/FDICCustomerAssistanceForm

Mail questions
Federal Deposit Insurance Corporation
Attn: Deposit Insurance Section
550 17th Street, NW
Washington, DC 20429