Ask the Experts!
The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers. Here’s the question of the day.
Question: I understand the FDIC protects deposit accounts from bank failure up to $250,000. Are there any ways to increase the amount protected?
Different kinds of accounts are each entitled to separate $250,000 protection. According to the FDIC’s website, to qualify for this expanded coverage, the requirements for insurance coverage in each ownership category must be met.
Single Account Ownership Category: The FDIC combines all single accounts owned by the same person at the same bank and insures the total up to $250,000.
Certain Retirement Account Ownership Category: The FDIC adds together all certain retirement accounts owned by the same person at the same bank and insures the total up to $250,000.
Joint Account Ownership Category: Husband and Wife have one joint account at the bank. The FDIC combines each co-owner’s shares of all joint accounts at the bank and insures each co-owner’s total up to $250,000. Assume their account has $500,000 in it. Husband’s ownership share in all joint accounts at the bank equals half of the joint account or $250,000, so his share is fully insured. Wife’s ownership share in all joint accounts at the bank equals half of the joint account or $250,000, so her share is fully insured.
Revocable Trust Account Ownership Category: When a revocable trust owner names five or fewer different beneficiaries, the trust is insured up to $250,000 for each different beneficiary.
Depositors can also expand protection by making deposits in more than one FDIC-insured bank.
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