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Insuring Your Deposits

New FDIC Deposit Insurance Limits
On August 10, 2010, the FDIC permanently increased the standard maximum deposit insurance amount from $100,000 to $250,000. This permanent increase became effective July 22, 2010.

Notice of Changes in Temporary FDIC Insurance Coverage for Transaction Accounts
All funds in a "noninterest-bearing transaction account" are insured in full by the Federal Deposit Insurance Corporation from December 31, 2010, through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC's general deposit insurance rules.

The term "noninterest-bearing transaction account" includes a traditional checking account or demand deposit account on which the insured depository institution pays no interest. It also includes Interest on Lawyers Trust Accounts ("IOLTAs"). It does not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts, and money-market deposit accounts.

For more information about temporary FDIC insurance coverage of transaction accounts, visit www.fdic.gov.

Important notice for non-interest-bearing transaction accounts with an overnight sweep feature
A non-interest-bearing transaction deposit account may include an overnight sweep of the funds into an investment Money Market Fund ("AIM accounts"). For these accounts only, from the time that the funds are "swept from" the non-interest-bearing transaction account, until the time that the funds are "swept back" into the non-interest-bearing transaction account, the unlimited coverage under the Transaction Account Guarantee Program does NOT apply.

Insuring Your Deposit- FDIC Insurance
The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government. The FDIC protects you against loss of your deposits if you bank with a FDIC insured bank or saving association. If your insured bank fails, FDIC insurance will cover your deposits dollar for dollar, including principal and any accrued interest up to the insurance limit. Certain retirement accounts such as Individual Retirement Accounts (IRA's) are insured up to $250,000 per depositor. For coverage over $250,000, the FDIC provides separate insurance coverage for deposit accounts held in different categories:

Common Ownership Categories

• Single Accounts
• Certain Retirement Accounts
• Joint Accounts
• Revocable Trust Accounts
• Employee Benefit Plan Accounts
• Corporate/ Partnership/ Unincorporated Assoc. Accounts

Single Accounts

Single accounts are deposit accounts owned by one person and titled in that person’s name only. All single accounts added together are insured up to $250,000.

Single accounts also include accounts held in the name of a business of that as a sole proprietorship (for example DBA… account).

Certain Retirement Accounts

These are deposit accounts owned by one person and titled in that person’s retirement plan. Only the following types of retirement plans are insured:

• Individual Retirement Accounts (IRAs) including Traditional IRA’s, Roth IRA’s, Simplified Employee Pension (SEP) IRA’s, and Savings Incentive Match Plans for Employees (SIMPLE) IRA’s
• Section 457 Deferred Compensation Plan Accounts
• Self- Directed Defined Contribution Plan Accounts
• Self-Directed Keogh (or H.R.10) Plan Accounts

All the deposits that an individual has in any of the above types of retirement plans are added together are insured up to $250,000.

Note- Naming beneficiaries on a retirement account does not increase deposit insurance coverage.

Joint Accounts

Joint accounts are deposit accounts owned by two or more people. If both owners have equal rights to withdrawal money from a joint account, each person’s shares of all joint accounts are added together and insured up to $250,000.

If a couple has a joint checking account and a joint savings account, each co-owner’s share of the two accounts is insured up to $250,000, providing up to $500,000 of coverage for the couple's joint accounts.

Revocable Trust Accounts

Revocable trust accounts are deposits held in either a Payable-on-Death (POD) account or a Living Trust Account.

A POD account, also known as Testamentary or Totten trust accounts are the most common form of revocable trust deposits. These informal revocable trusts are created when an account owner signs an agreement (usually part of the bank’s signature card) stating that deposits will be payable to one or more named beneficiaries upon the owner’s death.

The owner of a POD account is insured up to $250,000 for each beneficiary if all of the following requirements are met:

1. The account title must include a commonly accepted term such as "payable-on-death," "in trust for," "as trustee for" or similar language to indicate the existence of a trust relationship. The term may be abbreviated (for example "POD," "ITF" or "ATF").
   
   
2. The beneficiaries must be identified by name in the deposit account records of the insured bank.
   
   
3. A beneficiary must be a person, charity or another non-profit organization (as recognized by the Internal Revenue Service). All other beneficiaries are not eligible for separate coverage as revocable trust deposits.

Living trust accounts, or family trusts are formal revocable trusts created for estate planning purposes. The owner of the living trust controls the deposits in the trust during his or her lifetime.

Determining coverage for the living trusts can be complicated and requires more detailed information about the FDIC’s insurance rules. Please contact the FDIC at www.FDIC.gov or (877) 275-3342, or speak with a branch manager for more information.

Employee Benefits Plan Accounts

Employee benefit plan accounts are deposits of a pension plan, profit-sharing plan, or other employee benefit plans which are insured up to $250,000 for each participant’s non-contingent interest in the plan.

Plan participants who want to know more about how a plan’s deposits are insured, should consult with the plan administrator.

Corporate/ Partnership/ Unincorporated Association Accounts

Corporations, Partnerships, and Unincorporated association accounts, including for-profit and not-for-profit organizations, are insured under the same ownership category. To qualify for coverage under this category a corporation, partnership, or unincorporated association must be engaged in an “independent activity” to qualify for coverage, meaning that the entity is operated primarily for the same purpose other than to increase insurance coverage.

The above accounts are insured up to $250,000 and are insured separately from personal accounts of the entity's stockholders, partners, or members. The number of partners, members, or account signatories that a corporation, partnership, or unincorporated association has does not affect coverage.

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

Accounts in the names of sole proprietorships (for example, "DBA accounts") are not insured in this category. Rather, they are added to the owner's other single accounts, if any, at the same insured bank and the total is insured up to $250,000. (See Single Accounts  above).

Calculate insurance coverage using the FDIC's online Electronic Deposit Insurance Estimator at: www2.fdic.gov/edie

There are methods to set up accounts to maximize FDIC insurance. Clients should consult with their bank representative or branch manager for more information if they have specific questions. For further information on FDIC insurance coverage please visit www.FDIC.gov or call (877) 275-3342.

Notice: The information provided is presented in a non-technical way and is not intended to be a legal interpretation of the FDIC’s laws and regulations on insurance coverage. For greater detail concerning the technical aspects of insurance coverage, depositors or their counsel may wish to consult the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) and the FDIC’s regulations relating to insurance coverage (12 C.F.R. Part 330). Federal law expressly limits the amount of insurance the FDIC can pay to depositors and no representation made by any person can increase that coverage.