My sister, mother, and I were on a joint account. We were told that having the three parties on the account we would be covered for up to $300,000. My mother is now deceased; can we move some of the money to protect it, since it is over the limit?
Before you leap to move your funds, find out whether they're insured. The account, if you've done nothing with it, is now legally jointly owned by you and your sister.
Do you or your sister have any other joint accounts at the same institution? Each of you should determine your portion of all joint accounts in the bank. For example, you'd use half of the balance of a two-person joint account, a third of a three-person joint account, and so forth. Then each of you should add up those portions. Of your total, you're insured up to $250,000 and your sister has up to $250,000 coverage on her joint account total, so if this is the only joint account in which either of you has an interest, you would together have insurance coverage up to $500,000.
There is a provision in the FDIC's rules that gives you and your sister a grace period of up to six months from your mother's death to move funds from the account. If the balance is under $750,000 (the insured amount before your mother's death) and neither you nor your sister has other joint accounts, the amount above $500,000 would continue to be insured until that grace period ends. If you are over the insured limit, you should be able to restructure your accounts or move some of them to another insured institution. If the money is in a three-party joint certificate of deposit, the bank may allow you to make at least a partial early withdrawal without penalty to make that change.
Note: This page has been updated to reflect the temporary increase in deposit insurance limits enacted as part of the Emergency Economic Stabilization Act, effective October 3, 2008. The "standard maximum deposit insurance amount" on FDIC and NCUSIF deposit coverage was increased to $250,000 beginning on 10/3/08. It will revert to $100,000 after 12/31/2009.
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Before you leap to move your funds, find out whether they're insured. The account, if you've done nothing with it, is now legally jointly owned by you and your sister. 