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FDIC Consumer News
Important Update: FDIC Insurance Coverage Increased in Late 2008
In the fall of 2008, Congress temporarily increased the basic FDIC insurance coverage limit from $100,000 to $250,000 through December 31, 2009. In addition, the FDIC simplified the rules for the calculation of deposit insurance coverage for revocable trust deposits, including an expanded definition of the "eligible beneficiaries" for additional insurance coverage. As a result, certain previously published information related to FDIC insurance may not reflect the current insurance coverage. For more information, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342) Monday through Friday, 8:00 a.m. to 8:00 p.m., Eastern Time. For the hearing-impaired, the number is 1-800-925-4618.
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Spring 2006
You Get a Large Windfall: How Can It All Be FDIC-Insured?
The FDIC frequently gets inquiries from people who, because of a recent development (perhaps an inheritance, a home sale, or a big payment from a pension or insurance claim) have a large sum of money they want to have fully protected by FDIC insurance. "They are often surprised to learn there are ways they can deposit much more than $100,000 at one bank and have all of it insured by the FDIC," said Kathleen Nagle, chief of the agency's Deposit Insurance Section.
In general, to maximize your FDIC insurance coverage at one bank, you can deposit funds in different "ownership categories" (such
as single accounts, joint accounts and certain trust accounts). Because each
category is separately insured, that enables you to go beyond the basic deposit
insurance coverage of $100,000. Also, payable-on-death accounts (which state
who will get the funds upon your death) may get extra coverage based on how
many qualified family members are named as beneficiaries (see misconception
number 8).
However, before structuring accounts just to maximize insurance coverage, the FDIC has some warnings. "First, remember that if you add someone as a co-owner to an account just to maximize your insurance coverage, this other person will have as much right to withdraw the money as you do," Nagle said. "Second, only name beneficiaries to a payable-on-death account if you truly want that person to get the money if you die. Third, make sure you meet any FDIC requirements for obtaining coverage in the different ownership categories."
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