FDIC Deposit Insurance Coverage
A common and reasonable question we get from clients is on the safety and solvency of their bank and what exactly is protected by FDIC insurance limits and for how long. The current limits were created in 2008 to prevent a run on the banks due to economic panic. The placebo worked, for now. Here are the current numbers to consider. – Ike Devji
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC was established in 1933, no depositor has ever lost a single penny of FDIC-insured funds.
FDIC insurance covers all deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit. FDIC insurance does not cover other financial products and services that banks may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or securities.
The standard insurance amount is $250,000 per depositor, per insured bank for each account ownership category.
The FDIC provides separate coverage for deposits held in different account ownership categories. Depositors may qualify for more coverage if they have funds in different ownership categories and all FDIC requirements are met. (For details on the requirements, go to www.fdic.gov/deposit/deposits.
The following chart shows standard insurance amounts for FDIC account ownership categories. All deposits that an accountholder has in the same ownership category at the same bank are added together and insured up to the standard insurance amount.
Organized by account ownership category
Single Accounts owned by one person = $250,000 per owner
Joint Accounts owned by two or more persons = $250,000 per co-owner
Certain Retirement Accounts includes IRAs = $250,000 per owner
Revocable Trust Accounts $250,000 per owner per beneficiary up to 5 beneficiaries (more coverage available with 6 or more beneficiaries subject to specific conditions and requirements)
Corporation, Partnership and Unincorporated Association Accounts $250,000 per corporation, partnership or unincorporated association
Irrevocable Trust Accounts $250,000 for the non-contingent, ascertainable interest of each beneficiary
Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable interest of each plan participant
Government Accounts $250,000 per official custodian (more coverage available subject to specific conditions)
To calculate your deposit insurance coverage Use the FDIC’s Electronic Deposit Insurance Estimator (EDIE) For questions about FDIC coverage limits and requirements Visit www.FDIC.gov/deposit/deposits, call toll-free 1-877-ASK-FDIC, or ask a representative at your bank
From December 31, 2010 through December 31, 2012, at all FDIC-insured institutions, deposits held in noninterest-bearing transaction accounts will be fully insured regardless of the amount in the account. For more information, see the FDIC’s comprehensive guide, Your Insured Deposits , at www.fdic.gov/deposit/deposits.