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Four Accounts, Same Bank: What is Insured?
I have a simple question to which I don't seem to be able to get a simple answer. My husband and I both have private checking and savings accounts, i.e., four accounts. We also have a joint savings account. These are all at the same bank. My understanding of the FDIC website is that we are each insured for $100k for our private accounts, and we are each insured for $100k for our joint account, so our total insured assets are $400k. The man we spoke to at the bank said, $100k per person per bank. Which is it?
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 FDIC insurance will depend on how those accounts are owned. If the depositor is an individual, the two accounts are added together and a single $100,000 insurance limit is imposed. If one of the accounts is held jointly with one or more individuals, there is a separate $100,000 per depositor limit.
If you own one of the two accounts as an individual, but have designated the account to be payable on your death to another individual or to a charity or qualified non-profit, there's yet another $100,000 insurance limit per beneficiary, and if one of the accounts is in an IRA or other self-directed retirement account, your interest in that account is insured up to $250,000. Contact your financial institution for more information.The FDIC coverage limits are separate for accounts you own solely and accounts on which you are a joint owner.
For example, if you have a checking account and a savings account in the bank in your name alone, the two accounts are added together and insured for up to $100,000. If your husband also has a checking and savings account in his name alone in the same bank, his two accounts are added together and insured up to $100,000. Then you take your interests in all joint accounts in the bank. If there are two owners on an account, you are presumed to own half it; if there are four owners, you are presumed to own 25% of it, and so on. Add those interests up, and you get up to $100,000 coverage. Same for your husband. If the only joint account you or your husband has in the bank is one that's jointly held by both of you, you each get up to $100,000 coverage, so the account could be insured to $200,000.
If your daughter's account is held by a custodian under the Uniform Gifts to Minors Act, whether the custodian is you or your husband or another adult, it will be separately insured up to $100,000. If your daughter's account is in the form of a Pay on Death account owned by you or your husband, naming your daughter as the beneficiary, it gets separate coverage up to $100,000. If the Pay on Death account is jointly owned by you and your husband, the FDIC's $100,000 per depositor per beneficiary rule would allow you to have $200,000 insurance coverage on the account.
With only individual and joint accounts, you and your husband could have insured account balances of $400,000, and the addition of a separate $100,000 or $200,000 in insured balances benefiting your daughter. As if that were not enough, you and your husband could each have up to $250,000 in insured balances in deposits held in IRA and other self-directed retirement plans at the same bank, separate from all the other accounts I've described.
The FDIC insurance rules are complicated, and there are, unfortunately, bankers who do not understand them well. In fact, the FDIC is currently conducting a series of telephone seminars to get bankers informed of the rules.
Published on BankingQuestions.com 10/02/08
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