Insuring Your Deposits

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:


FDIC insurance covers all deposit accounts, including:

  • Checking accounts 
  • Savings accounts 
  • Money market deposit accounts 
  • Certificates of deposit

FDIC insurance does not cover other financial products and services that banks may offer, such as stocks, bonds, mutual funds, life insurance policies, annuities or securities.

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

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, without named beneficiaries, and titled in that person’s name only. All single accounts owned by the same person at the same bank are added together are insured up to $250,000.

Account Type

Account Balance

Amount Insured

Checking Account

$10,000

$10,000

Savings Account

$100,000

$100,000

Certificate of Deposit (CD)

$100,000

$100,000

TOTAL

$210,000

$210,000


A single account also includes:

  • An account established by an agent or custodian for one person 
  • A business account for a sole proprietorship 
  • An account representing a deceased person's funds

Certain Retirement Accounts
 

 A retirement account in which plan participants have the right to direct how the money is invested. 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, whether self-directed or not
  • Self- Directed Defined Contribution Plan Accounts such as a 401k or profit-sharing plan
  • Self-Directed Keogh (or H.R.10) Plan Accounts

All the deposits of the retirement accounts listed above owned by the same person at the same bank are added together are insured up to $250,000.

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

Joint Accounts
 

A deposit account owned by two or more people, without named beneficiaries. Each co-owner's shares of every joint account at the same insured bank are added together and insured up to $250,000.

To qualify for coverage, all owners must:

  •  Be living people
  •  Have equal rights to make withdrawals
  •  Sign the deposit account signature card (unless the account is a CD). Electronic signatures meet this requirement.
     

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.

Account Holder

Ownership Share
(Checking and Savings together)

Amount Insured

James

$225,000

$225,000

Sarah

$225,000

$225,000

TOTAL

$450,000

$450,000


Revocable Trust Accounts
 

A deposit account owned by one or more people that identifies one or more beneficiaries who will receive the deposits upon the death of the owner(s). This includes both formal "Living" Trusts and informal In Trust For (ITF) and Payable on Death (POD) accounts.
 

 All revocable trust accounts owned by the same person at the same bank are added together, and the owner is insured up to $250,000 per beneficiary.

  •  A revocable trust can be revoked, terminated or changed at any time, at the discretion of the owner(s).The account title must disclose trust relationship with phrases such as Living/Family Trust, Payable on Death (POD), In Trust For (ITF). 
  •  Beneficiaries must be people, charities, or non-profit organizations, and must either be named in the bank records or identified in the trust document.

Irrevocable Trust Account

A deposit account held in connection with an irrevocable trust established by statute or a written trust agreement. The owner contributes deposits or other property to the trust and gives up all power to cancel or change the trust. 

Irrevocable trusts typically have contingent interests which results in the trust being insured for a maximum of $250,000, regardless of the number of beneficiaries designated. However, the non-contingent interests of a beneficiary in all irrevocable trusts established by the same owner and held at the same bank are added together and insured up to $250,000. More coverage is available if certain requirements are met.

 

Determining coverage for the 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
 

A deposit of a pension plan, defined benefit plan or other employee benefit plan that is not self-directed. An employee benefit plan account is an account representing funds of a plan where investment decisions are made by a plan administrator (not by the participants). The plan is insured up to $250,000 of each participant's noncontingent interest in the plan per bank. For plans where the interests are contingent, such as health and welfare plans, the coverage is $250,000 for the plan itself.
 

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

Corporation, Partnership or 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 separately organized under state law and operate primarily for some purpose other than to increase insurance coverage.
 

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

Government Accounts

The Official Custodian of a public unit is insured up to $250,000 per bank. Coverage amounts may be more depending on the type of deposit and whether the public unit is located in the same state as the bank. Includes deposit accounts owned by:

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

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
 

To determine your deposit insurance coverage or ask any other specific deposit insurance questions, call 1-877-ASK-FDIC (1-877-275-3342 or visit www.FDIC.gov.
 

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.