The FDIC insures deposits in most banks and savings associations located in the United States. The FDIC protects depositors against the loss of their deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
For simplicity, the term "insured bank" is used to mean any bank or savings association that has FDIC insurance.
FDIC insurance covers all types of deposits received at an insured bank, including deposits in checking, NOW, and savings accounts, money market deposit accounts, and time deposits such as certificates of deposit (CDs).
FDIC deposit insurance covers the balance of each depositor's account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank's closing.
The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these investments were bought from an insured bank.
The FDIC does not insure U.S. Treasury bills, bonds, or notes. These are backed by the full faith and credit of the United States government.
The basic insurance amount is $250,000 per depositor, per insured bank (please note that since the $250,000 amount may change at any time, the FDIC.gov web site should be consulted for the latest insured amount). It is expected that the $250,000 amount will expire December 31, 2009.
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A L E R T |
Verify FDIC Information Frequently -The basic insurance amount is $250,000 per depositor, per insured bank -The $250,000 amount may change at any time -Check with the FDIC web site for the most current insurance amounts -The $250,000 amount is expected to expire December 31, 2009 -The amount will probably go back to $100,000 per depositer, per insured bank |
The amount applies to all depositors of an insured bank. Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank. Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than the basic insurance amount at one insured bank and still be fully insured.
The following sections describe the ownership categories recognized by FDIC regulations and the requirements that must be met to have coverage beyond the basic insurance amount.
-Single Accounts
-Certain Retirement Accounts
-Joint Accounts
The following sections are also ownership categories recognized by FDIC regulations, but are not covered in this document due to the complexities of these categories. Go to the FDIC.gov web site for further information about these categories.
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S U M M A R Y |
FDIC Ownership Categories -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. The following deposit account types are included in this ownership category:
-Accounts held in one person's name alone
-Accounts 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
-Accounts held in the name of a business that is a sole proprietorship (for example, a "DBA account")
-Accounts established for a decedent's estate, and
-Any account that fails to qualify for coverage under another ownership category.
-All single accounts owned by the same person at the same insured bank are added together and the total is insured up to the basic insurance amount.
If an individual has a deposit account titled in his or her name alone but gives another person the right to withdraw deposits from the account, the account will be insured as a single account only if the insured bank's deposit account records indicate that:
-the other signer is authorized to make withdrawals pursuant to a Power of Attorney,
or
-the account is owned by one person and the other person is authorized to withdraw deposits on the owner's behalf (for example, a convenience account)
If the insured bank's account records do not indicate that such a relationship exists, the deposit would be insured as a joint account.
Certain Retirement Accounts
These are deposits owned by one person and titled in the name of that person's retirement account.
The following types of retirement plan deposits qualify for coverage as "certain retirement accounts":
All types of IRAs, including:
-Traditional IRAs
-Roth IRAs
-Simplified Employee Pension (SEP) IRAs
-Savings Incentive Match Plans for Employees (SIMPLE) IRAs
-All Section 457 deferred compensation plan accounts, such as eligible deferred compensation plans provided by state and local governments regardless of whether they are self-directed
-Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE held in the form of 401(k) plans, self-directed defined contribution money purchase plans, and self-directed defined contribution profit-sharing plans
-Self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals
All retirement accounts listed above owned by the same person in the same FDIC-insured bank are added together and the total is insured up to the basic insurance amount.
The FDIC defines the term "self-directed" to mean that plan participants have the right to direct how the money is invested, including the ability to direct that the deposits be placed at an FDIC-insured bank.
If a participant of a retirement plan has the right to choose a particular depository institution's deposit accounts as an investment, the FDIC would consider the account to be self-directed. Also, if a plan has as its default investment option deposit accounts at a particular FDIC-insured institution, the FDIC would deem the plan to be self-directed for deposit insurance purposes because, by inaction, the participant has directed the placement of such deposits.
However, if a plan's only investment vehicle is the deposit accounts of a particular bank, so that participants have no choice of investments, the plan would not be deemed self-directed for deposit insurance purposes. Finally, if a plan consists only of a single employer/employee, and the employer establishes the plan with a single-investment option of plan assets, the plan would be considered self-directed for deposit insurance purposes.
Naming beneficiaries on a retirement account does not increase deposit insurance coverage.
Coverdell Education Savings Accounts (formerly known as an Education IRAs), Health Savings Accounts, and Medical Savings Accounts are not included in this ownership category. Depending on the structure, these accounts may be included in the single account or trust account ownership category.
Defined-benefit plans (benefits predetermined by an employee's compensation, years of service, and age) are not included in this ownership category. For information on these types of accounts, refer to the section on Employee Benefits Plan accounts.
Joint Accounts
A joint account is a deposit owned by two or more people. To qualify for insurance under this ownership category, all of the following requirements must be met:
-All co-owners must be people. Legal entities such as corporations, trusts, estates, or partnerships are not eligible for joint account coverage.
-All co-owners must have equal rights to withdraw deposits from the account. For example, if one co-owner can withdraw deposits on his or her signature alone but the other co-owner can withdraw deposits only with the signature of both co-owners, the co-owners do not have equal withdrawal rights.
-All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservator.
If all of these requirements are met, each co-owner's share of every account that is jointly held at the same insured bank is added together with the co-owner's other shares, and the total is insured up to the basic insurance amount.
The FDIC assumes that all co-owners' shares are equal unless the deposit account records state otherwise.
For example, a husband and wife could have up to double the basic insurance amount in one or more joint accounts at the same insured bank and the deposits would be fully insured. The husband's ownership share is insured up to the basic insurance amount and the wife's ownership share is insured up to the basic insurance amount.
Insurance coverage of joint accounts is not increased by rearranging the owners' names or by changing the styling of their names. Alternating the use of "or," "and" or "and/or" to separate the names of co-owners in a joint account title also does not affect the amount of insurance coverage provided.
In addition, using different Social Security numbers on multiple accounts held by the same co-owners will not increase insurance coverage.
Source: Federal Deposit Insurance Corporation