Insuring Your Deposits: Categories of Ownership

Insuring Your Deposits: Categories of Ownership

The deposits held in different account ownership categories are insured separately from each other, thus maximizing the possible coverage at one financial institution. Below we’ve outlined the categories of ownership and the limits in that area.

Single Owner
A single account is a deposit owned by one person. All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $250,000. The total includes sole proprietorships and DBA accounts.

Joint Owners
$250,000 for each joint owner regardless of number of joint accounts
In addition to their individual insured accounts, each person is entitled to a maximum of $250,000 coverage for their interest in all of their joint accounts. For example, a husband and wife could have one joint account with $500,000 fully covered. The husband’s ownership share is insured up to $250,000 and the wife’s ownership share is insured up to $250,000. The FDIC assumes that all co-owners’ shares are equal unless the account records state otherwise. Insurance protection is not increased by merely rearranging the names of owners or by having more than one joint account for the same combination of owners.

Retirement Accounts
Owned by one person, these accounts are specifically for retirement needs. Examples include IRA accounts and 401(k) plans. Retirement accounts are insured separately from single, joint and trust accounts. They are subject to special rules for deposits and withdrawals. The retirement accounts owned by the same person at the same bank are added together and the total is insured to $250,000. Adding beneficiaries on a retirement account does not increase coverage.

Revocable Trust Accounts
$250,000 for each qualifying beneficiary
Funds deposited into revocable trust accounts are separately insured to $250,000 per owner, per beneficiary. These accounts include payable-on-death (POD), in-trust-for (ITF), as-trustee-for (ATF) and living/family trust accounts. They provide that, at the death of the owner, funds will pass to a named beneficiary. Any person or charitable organization (501c3) qualifies as a beneficiary under the new rules.

Corporation/Partnership/Association Accounts
Deposits owned by a corporation, partnership or unincorporated association are insured up to $250,000 at a single bank, but are insured separately from personal accounts of the entity’s stockholders, partners or members. Accounts owned by the same entity but designated for different purposes are not insured separately.

An experienced financial services professional can help you maximize your coverage depending on how your accounts are set up. See an example.

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