Depositor Insurance Limits

An important issue in the news lately relates to several regional banks being on the brink of failing and concerns about depositor’s funds in the banks.  You may have heard about the amounts in banks that are insured by the FDIC, but it is important to know the details of how to allocate funds in your accounts to make sure you are covered by the FDIC insurance.

The standard deposit insurance coverage limit is $250,000 per depositor, per FDIC-insured bank, per ownership category. If your funds are deposited in a credit union, the National Credit Union Administration (NCUA) provides the same insurance amount per ownership category.  Below is a list of the different ownership categories covered by the insurance:

  • Single accounts —12 C.F.R. § 330.6
  • Joint accounts — 12 C.F.R. § 330.9
  • Revocable trust accounts —12 C.F.R. § 330.10
  • Irrevocable trust accounts —12 C.F.R. § 330.13
  • Certain retirement accounts —12 C.F.R. § 330.14(b)(2)
  • Employee benefit plan accounts — 12 C.F.R. § 330.14
  • Business/Organization accounts — 12 C.F.R. § 330.11
  • Government accounts (public unit accounts) —12 C.F.R. § 330.15
  • Mortgage servicing accounts for principal and interest payments — 12 C.F.R. § 330.7(d)
  • Accounts held by a depository institution as the trustee of an irrevocable trust — 12 C.F.R. § 330.12
  • Annuity contract accounts — 12 C.F.R. § 330.8
  • Public bond accounts — 12 C.F.R. § 330.15(c)
  • Custodian accounts for Native Americans — 12 C.F.R. § 330.7(e)
  • Accounts deposited by an IDI pursuant to the Bank Deposit Financial Assistance Program of the Department of Energy — 12 U.S.C. § 1817 (i)(3)

Are your funds Covered? A few strategies to ensure that your funds are covered by the FDIC, or NCUA insurance include the following:

  1. Ensure the bank or credit union you are using for your deposits is insured by the FDIC, or NCUA.
  2. Ensure the amount of funds at each bank/credit union and in each account based on the different ownership categories has $250,000 or less in them.
  3. Analyze your accounts and consider moving money to interest bearing accounts from no interest, or low interest checking accounts to reallocate your funds to a new ownership category account and increase your interest income.
  4. If you have a legitimate concern about your bank, or credit union taking on too much risk, then you should move your money to another financial institution.
  5. Contact me for more information.
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