FDIC Insurance Limits

 

  

 

        In these tough economic times, we have some good news for you.  On October 3, 2008 the Emergency Economic Stabilization Act of 2008 temporarily raised the level of Federal Deposit Insurance Corporation (FDIC) insurance coverage from $100,000 to $250,000 per depositor for interest-bearing accounts and for the full value of non-interest bearing accounts. 

 

        However, FDIC coverage on interest-bearing accounts may be increased in a single bank - if the accounts are held in different ownership categories that include single accounts, joint accounts, certain retirement accounts, and revocable trust accounts.

 

         An interesting facet concerns revocable trust accounts which are deposits held in either payable-on-death (POD) accounts or living trust accounts.  Using revocable trust accounts can substantially increase your FDIC insurance coverage because the interest of each beneficiary named by the account owner is insured up to $250,000.  For example, if you have named 11 persons as beneficiaries of your revocable trust account, then up to $2,750,000 in this account will be fully insured, if certain requirements are met.

 

        Following is an example from the FDIC website which applies to POD accounts only: 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 equal beneficiaries.  These three accounts totaling $2,000,000 are fully insured because each is entitled to $250,000 of coverage for the interest of each beneficiary in the accounts.

 

 

Account Title	Account Balance	Amount Insured	Amount Uninsured
Bill POD to Sue	$     250,000	$     250,000	$                 -
Sue POD to Bill	250,000	250,000	-
Bill & Sue POD to 3 children	1,500,000	1,500,000	-
Total	$   2,000,000	$   2,000,000	$                 -

 

 

        On January 1, 2010, the FDIC coverage limit will return to $100,000 for all deposit categories except IRAs and certain retirement accounts, which will continue to be insured up to $250,000 per owner.  Please call us at your convenience if you would like more information regarding FDIC insurance coverage.

 

 

                                                                    SOUKUP, BUSH & ASSOCIATES, P.C.