Maximizing the Benefits of FDIC Coverage
Many people mistakenly believe that they can have only $250,000
of their deposits insured by the FDIC at one institution. Despite this
standard FDIC limitation, there are several ways you can get more than $250,000
in FDIC coverage at one insured bank without having to divide funds and
spread out your accounts among several different banks.
How is this possible? It's because FDIC insurance is
based on different categories of account ownership. Funds held in these
different account ownership categories are insured separately from each
other, with each category offering up to $250,000 in insurance per
depositor and $250,000 for certain retirement accounts.
Here is a list of the most common account ownership
categories:
Individual -
An individual account is an account owned by one person.
The most common examples of individual accounts are checking, savings,
money market and certificate of deposit accounts with a single account
owner. Other individual accounts can be those held in the name of a sole
proprietorship or established for a decedent's estate.
Joint Account -
A joint account is a deposit account owned by two or more people
who have equal rights to withdraw money from the account. They can include
such deposit accounts as checking, savings, money market and certificates
of deposit.
Revocable Trust -
A revocable trust account includes deposits held in
either a formal revocable trust or an informal revocable trust.
Revocable trust accounts are created when the account owner signs an
agreement - usually part of the bank's signature card - stating that the
funds will be payable to a beneficiary upon the owner's death.
Retirement Account -
A retirement account is classified by the FDIC as any
deposit you have in a self-directed retirement account at an insured bank
for which you have the right to choose how the money is deposited or
invested. The most common types of retirement accounts include traditional
and Roth Individual Retirement Accounts (IRAs), Simplified Employee Benefit
Plans (SEPs) and tax-deferred Keogh plans
*First CornerStone Bank non-interest-bearing transaction accounts are fully guaranteed by the FDIC for
the entire amount in the account. Click here for more information.
For more FDIC account ownership categories and information, click here.
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