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FDIC Coverage of Accounts

The FDIC (Federal Deposit Insurance Corporation) was established by the U.S. Congress in 1933 with a charter to insure bank deposits. Over the years, the FDIC's insurance limit has increased. The most recent changes, which took effect in April 1999, simplified and in some cases, expanded the coverage of deposit insurance for joint accounts and revocable trust accounts. These changes may or may not affect you, depending on your particular situation.

About individual accounts

Each depositor's funds are insured to $100,000--and that limitation applies to the total of a person's funds in checking deposits, savings deposits and time certificates of deposit for which an insured bank is liable. So deposit insurance is not increased, for example, by putting $100,000 into a savings account and $100,000 into a checking account in the same insured bank. (In this case, $100,000 is insured, not $200,000.)

About joint accounts

In addition to individual insured accounts, each person is entitled to a maximum of $100,000 coverage for interests in all of his/her joint accounts. Each co-owner of a joint account must have equal withdrawal rights and must personally execute a signature card--except in the case of jointly-held certificates of deposit (CDs) or deposits represented by negotiable instruments. Jointly-held certificates of deposit must in fact be jointly-owned to be insured as a joint account.

About revocable trust accounts

Funds deposited into revocable trust accounts, whose beneficiaries are a spouse, child, grandchild, parent or sibling of the owner, are separately insured to $100,000 (in addition to the insurance on valid individual and joint accounts). They provide that, at the death of the owner, funds will pass to a named beneficiary, i.e., spouse, child, grandchild, parent or sibling. The person who has the power of revoking the trust is considered the owner of the account.

For more information about FDIC coverage, visit the FDIC website at www.fdic.gov or access its Electronic Deposit Insurance Estimator (EDIE) located at www2.fdic.gov/edie.

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