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Ownership Categories
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 $250,000.
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 $500,000 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 $250,000 and the wife's ownership
share is insured up to $250,000.
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.
| Account Title |
Deposit Type |
Account
Balance |
| Mary and John Smith |
NOW |
$ 125,000
|
| John or Mary Smith |
Savings |
200,000
|
| Mary or John or Robert Smith |
CDs |
300,000
|
| Total Deposits |
|
$
625,000
|
| Insurance coverage for each owner is calculated as follows: |
| Depositors |
Ownership
Share |
Amount
Insured |
Amount
Uninsured |
| Mary |
$
262,500
|
$
250,000
|
$ 12,500 |
| John |
262,500
|
250,000
|
12,500 |
| Robert |
100,000
|
100,000
|
0 |
| Total |
$
625,000
|
$
600,000
|
$ 25,000 |
Explanation:
- Mary's ownership share in all joint accounts equals 1/2 of the NOW account
($62,500), 1/2 of the savings account ($100,000), and 1/3 of the CD ($100,000),
for a total of $262,500. Since her coverage in the joint ownership category
is limited to $250,000, $12,500 is uninsured.
- John's ownership share in all joint accounts is the same as Mary's, so $12,500 is uninsured.
- Robert's ownership share in all joint accounts is 1/3 of the CD, or $100,000,
so his share is fully insured.
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