What is the FDIC?

The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC's creation in 1933, no depositor has ever lost even one penny of FDIC-insured deposits.

How can I check whether my bank is insured by FDIC?

Use Bank Find or call toll-free 1-877-ASK-FDIC (1-877-275-3342) to make sure your bank or savings association is insured by the FDIC. The FDIC insures deposits in most, but not all, banks and savings associations. Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank. All FDIC-insured depository institutions must display an official FDIC sign at each teller window or teller station.

What types of accounts are eligible for FDIC insurance?

FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking, NOW (Negotiable Order of Withdrawal) accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs) up to the insurance limit.

The FDIC does not insure the money you invest in stocks, bonds, mutual funds, crypto assets, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank or savings association.

How can I keep my deposits within FDIC insurance limits?

If you and your family have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage — your deposits are fully insured. A depositor can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements. In addition, federal law provides for insurance coverage of up to $250,000 for certain retirement accounts.

What are the basic FDIC coverage limits?*

Single Accounts (owned by one person with no beneficiaries): $250,000 per owner

Joint Accounts (two or more persons with no beneficiaries): $250,000 per co-owner

IRAs and other certain retirement accounts: $250,000 per owner

Trust accounts: Each owner is insured up to $250,000 for each unique eligible beneficiary named or identified in the trust, subject to specific limitations and requirements

*These deposit insurance coverage limits refer to the total of all deposits that account owners have at each FDIC-insured bank. The listing above shows only the most common personal ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met.

Is it possible to have more than $250,000 at one insured bank and still be fully covered?

You may qualify for more than $250,000 in coverage at one insured bank or savings association if you own deposit accounts in different ownership categories. The most common account ownership categories for individual and family deposits are single accounts, joint accounts, trust accounts, and certain retirement accounts.

What is a single account?

This is a deposit account owned by one person and titled in that person's name only, with no beneficiaries. All of your single accounts at the same insured bank are added together and the total is insured up to $250,000. For example, if you have a checking account and a CD at the same insured bank, and both accounts are in your name only, the two accounts are added together and the total is insured up to $250,000. Note that retirement accounts and trust accounts are not included in this ownership category.

What is a joint account?

This is a deposit account owned by two or more people and titled jointly in the co-owners' names only, with no beneficiaries. If all co-owners have equal rights to withdraw money from a joint account, a co-owner's shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000. Note that jointly owned revocable trust accounts are not included in this ownership category.

If a couple has a joint money market deposit account, a joint savings account, and a joint CD at the same insured bank, each co-owner's shares of the three accounts are added together and insured up to $250,000 per owner, providing up to $500,000 in coverage for the couple's joint accounts.

Example: John and Mary have three joint accounts totaling $600,000 at an insured bank. Under FDIC rules, each co-owner's share of each joint account is considered equal unless otherwise stated in the bank's records. John and Mary each own $300,000 in the joint account category, putting a total of $100,000 ($50,000 for each) over the insurance limit.

• Mary's ownership share in all joint accounts equals $300,000 [1/2 of the MMDA ($25,000) plus 1/2 of the savings account ($75,000) plus 1/2 of the CD ($200,000), for a total of $300,000]. Since her coverage in the joint ownership category is limited to $250,000, $50,000 is uninsured.
• John's ownership share in all joint accounts is the same as Mary's, so $50,000 is uninsured.

What is meant by certain retirement accounts?

These are deposit accounts owned by one person and titled in the name of that person's retirement plan. The following types of retirement plans are insured in this ownership category:

• Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs
• Section 457 deferred compensation plan accounts (whether self-directed or not)
• Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE IRA held in the form of a 401(k) plan, self-directed defined contribution money purchase plans, or self-directed defined contribution profit-sharing plans
• Self-directed Keogh plan (or H.R. 10 plan) accounts

All deposits that an individual has in any of the types of retirement plans listed above at the same insured bank are added together and the total is insured up to $250,000. For example, if an individual has an IRA and a self-directed Keogh account at the same bank, the deposits in both accounts would be added together and insured up to $250,000.

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

What are POD/ITF and a formal revocable trust accounts?

POD/ITF and formal revocable trust accounts are deposit accounts owned by one or more people that identifies one or more beneficiaries who will receive the deposits upon the death of the owner(s). A formal revocable trust can be revoked, terminated, or changed at any time, at the discretion of the owner(s). The term "owner" means the grantor, settlor, or trustor of a formal revocable trust.

The new trust ownership category includes both informal (POD/ITF) and formal revocable trusts as well as irrevocable trusts:

• Informal revocable trusts — also known as payable on death (POD), in trust for (ITF), testamentary, or Totten Trust accounts — are the most common form of revocable trusts. These informal revocable trusts are created when the account owner signs an agreement — usually part of the bank's signature card — stating that the deposits will be payable to one or more beneficiaries upon the owner's death.
• Formal revocable trust — also known as Living trusts or family trusts — are formal revocable trusts created for estate planning purposes. The owner of a formal revocable trust controls the deposits in the trust during his or her lifetime. The trust document sets forth who shall receive trust assets after the death of the owner.
• Irrevocable trusts — are held by a trust established by statute or a written trust agreement, in which the creator of the trust (grantor/settlor/trustor) contributes funds or property and gives up all power to cancel or change the trust. See the section below for additional information on irrevocable trusts.

Deposit insurance coverage for revocable trust accounts is provided to the owner of the trust. Each owner is insured up to $250,000 per beneficiary up to a maximum of $1,250,000 when five or more beneficiaries are named.

Trust coverage is based on all POD/ITF, formal revocable trust, and irrevocable trust deposits held by the same owner at the same bank. If Trust account has more than one owner, each owner's coverage is calculated separately, using the following formula:

Number of owners times number of beneficiaries times $250,000 = Amount insured with a maximum of $1,250,000 when five or more beneficiaries are named. Note: The FDIC does not limit the number of beneficiaries an owner can have on one or more trust accounts.

POD Account Example: Bill has a $250,000 POD account with his wife Sue as beneficiary. Sue has a $250,000 POD account with Bill as beneficiary. In addition, Bill and Sue jointly have a $1,500,000 POD account with their three children as beneficiaries.

These three accounts totaling $2,000,000 are fully insured because each owner is entitled to $250,000 of coverage for each beneficiary. Bill has $1,000,000 of insurance coverage because he names four beneficiaries — his wife in the first account and his three children in the third account. Sue also has $1,000,000 of insurance coverage — $250,000 for each of her beneficiaries — her husband in the second account and her three children in the third account.

When calculating coverage for revocable trust accounts, keep in mind that:

• Coverage is based on the number of beneficiaries named by each owner. Additional coverage is not provided for the trust owner(s). For example, if a father owns a $750,000 POD account naming his two sons as beneficiaries, the father's account is insured for $500,000 and the remaining $250,000 is uninsured. A common misconception is that deposit insurance is determined by counting or adding the total number of individuals listed on a POD account. Coverage is NOT calculated as owners plus beneficiaries times $250,000.
• FDIC insurance limits apply to all trust deposits — including all POD/ITF, formal revocable and irrevocable trust accounts — that the same trust owner has at one insured bank.

Trust accounts also include irrevocable trusts. These are deposit accounts held by a trust established by statute or a written trust agreement, in which the creator of the trust (grantor/settlor/trustor) contributes funds or property and gives up all power to cancel or change the trust.

There are two types of irrevocable trusts:

• Those created following of the death of an owner of a revocable trust.
• Those that are initially created as an irrevocable trust (often by a court order or established under a will) and are not derived from a revocable trust. The insurance coverage of these irrevocable trusts is described below.

How are funds deposited pursuant to an irrevocable trust insured?

Deposit insurance coverage for irrevocable trust accounts is provided to the owner of the trust. Each owner is insured up to $250,000 per beneficiary up to a maximum of $1,250,000 when five or more beneficiaries are named.

Trust coverage is based on all POD/ITF, formal revocable trust, and irrevocable trust deposits held by the same owner at the same bank. If a trust account has more than one owner, each owner's coverage is calculated separately, using the following formula:

Number of owners times number of beneficiaries times $250,000 = Amount insured with a maximum of $1,250,000 when five or more beneficiaries are named. Note: The FDIC does not limit the number of beneficiaries an owner can have on one or more trust accounts.

Important: While EDIE calculates coverage for most Irrevocable Trusts, there are two exceptions: EDIE does not calculate coverage for an irrevocable trust with a bank acting as trustee or for court-ordered trusts. Please call 1-877-ASK-FDIC (1-877-275-3342) for more information.

What are business accounts?

These are accounts established by corporations, partnerships, and unincorporated associations — including for-profit and not-for-profit entities — engaged in an independent activity, meaning that the entity is operated primarily for some purpose other than to increase insurance coverage.

1. What is the deposit insurance coverage for funds deposited by a corporation, partnership, or unincorporated association?
   Funds deposited by a corporation, partnership, or unincorporated association are insured up to a maximum of $250,000. Funds deposited by a corporation, partnership, or unincorporated association are insured separately from the personal accounts of the stockholders, partners, or members. To qualify for this coverage, the entity must be engaged in an independent activity, meaning that the entity is operated primarily for some purpose other than to increase deposit insurance.
2. Is there any way that a business can qualify for additional insurance coverage?
   No, there is no way that a corporation, partnership, or unincorporated association can qualify for more than $250,000 in deposit insurance coverage for its deposits at one bank. Separate accounts owned by the same entity, but designated for different purposes, are not separately insured. Instead, such accounts are added together and insured up to $250,000. If a corporation has divisions or units that are not separately incorporated, the deposit accounts of those divisions or units will be added to any other deposit accounts of the corporation for purposes of determining deposit insurance coverage.
3. Does the number of partners, members, or account signatories increase deposit insurance coverage?
   The number of partners, members, or account signatories that a corporation, partnership, or unincorporated association has does not affect coverage. For example, deposits owned by a homeowners association are insured up to $250,000 in total, not $250,000 for each member of the association.
4. How are deposits of a sole proprietorship insured?
   Deposits owned by a business that is a sole proprietorship are not insured under this category. Rather, they are insured as the single account deposits of the person who is the sole proprietor. Funds deposited in the sole proprietorship's name are added to any other single accounts of the sole proprietor and the total is insured to a maximum of $250,000.

Government Accounts

1. What are government accounts?
   Government accounts are also known as public unit accounts. This category includes deposit accounts of the United States, 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, or an Indian tribe.
2. How are public unit accounts insured?
   Insurance coverage of a public unit account differs from a corporation, partnership, or unincorporated association account in that the coverage extends to the official custodian of the funds belonging to the public unit rather than the public unit itself. The insurance coverage of public unit accounts depends upon (1) the type of deposit, and (2) the location of the insured depository institution.
3. Beginning on January 1, 2013
   
   Accounts held by an official custondian for a government unit will be insured as follows:
   
   In-State:
   
   • Up to $250,000 for the combined amount of all time and savings accounts (including NOW accounts) and
   • Up to $250,000 for all demand deposit accounts (interest-bearing and non-interest bearing).
   
   Out-of-State:
   
   • Up to $250,000 for the combined total of all deposit accounts.
4. What is the definition of a political subdivision?
   The term "political subdivision" is defined to include drainage, irrigation, navigation, improvement, levee, sanitary, school or power districts, and bridge or port authorities, and other special districts created by state statute or compacts between the states. The term "political subdivision" also includes any subdivision or principal department of a public unit (state, county, or municipality) if the subdivision or department meets the following tests:
   • The creation of the subdivision or department has been expressly authorized by the law of such public unit;
   • Some functions of government have been delegated to the subdivision or department by such law; and
   • The subdivision or department is empowered to exercise exclusive control over funds for its exclusive use.
5. What is the definition of an official custodian?
   In order to qualify as an "official custodian," such custodian must have plenary authority, including control, over funds owned by the public unit which the custodian is appointed or elected to serve. Control of public funds includes possession as well as the authority to establish accounts for such funds in insured depository institutions and to make deposits, withdrawals, and disbursements of such funds.