I have one CD for $80,000 and one for $60,000 in the same bank. The second CD is in my name, with my sister as the beneficiary. The first is in my name only. Is all $140,000 covered by FDIC insurance, or just the $100,000?
Assuming that the CD naming your sister as beneficiary is properly recorded on the bank's books, it should be separately insured from the CD in your name only. Each CD should be fully covered. Any natural person, or Internal Revenue Code-recognized charity or non-profit is eligible as a beneficiary for the purpose of obtaining separate coverage for revocable trust and "payable on death"accounts.
Note: Effective September 26, 2008, the FDIC amended its rules on insurance coverage of revocable trust accounts. A few days later, Congress included a temporary increase in deposit insurance limits 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.
The former restriction of coverage to "qualified beneficiaries" (immediate family members) was lifted. Coverage is now capped at $250,000 per beneficiary per depositor.For depositors with more than $1,250,000 in revocable trust accounts and more than five beneficiaries, the coverage is the greater of either $1,250,000 or the sum of all the named beneficiaries' proportional interests in the trusts, limited to $250,000 per different beneficiary.
Published on BankingQuestions.com 8/20/08
Updated 10/8/08
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
Assuming that the CD naming your sister as beneficiary is properly recorded on the bank's books, it should be separately insured from the CD in your name only. Each CD should be fully covered. Any natural person, or Internal Revenue Code-recognized charity or non-profit is eligible as a beneficiary for the purpose of obtaining separate coverage for revocable trust and 