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| We’ve all heard about FDIC-insured funds, but there are many details we may not be aware of. At Heritage Bank, we want to provide you with all the information you need to be a thoroughly-informed consumer. At each of our branches, we have booklets entitled, “Q&A – Questions and Answers About Your Insured Deposit from the Federal Deposit Insurance Corporation.” |
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In the meantime, we’ve pulled a few key questions from the booklet for your online review. If you’d like to see answers to all 43 questions, please stop by one of our branches and pick up this booklet. Also, you may download a .PDF file of the booklet below. It includes answers to the following general categories:
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General Insurance Questions |
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Basic Insurance Limit |
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Single Ownership Accounts |
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Joint Accounts |
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Testamentary (Payable-On-Death) Accounts |
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Revocable Living Trusts |
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Irrevocable Trusts |
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Retirement Accounts |
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Executor, Custodial, and Agent Accounts
(Deposits Held On Another’s Behalf) |
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Business Accounts |
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Deposits in Merged Institutions |
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| This page describes the deposit insurance coverage provided by the Federal Deposit Insurance Corporation (FDIC) to depositors of insured banks and insured savings associations. The FDIC is an independent agency of the U.S. Government. It was established by Congress in 1933 to insure bank deposits, help maintain sound conditions in our banking system, and protect the nation’s money supply in case of financial institution failure. FDIC-insured deposits are backed by the full faith and credit of the United States. |
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| Key Questions: |
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| Whose deposits does the FDIC insure? |
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| Any person or entity can have FDIC insurance on a deposit. A depositor does not have to be a United States citizen, or even a resident of the United States. |
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What types of financial institutions are insured
by the FDIC?
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| The FDIC insures deposits in some, but not all, banks and savings associations. FDIC-insured institutions must display an official sign at each teller window or teller station. Insured savings associations display the official savings association (eagle) sign. Insured banks display either the official bank (FDIC) sign or the official savings association (eagle) sign. |
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| What does federal deposit insurance cover? |
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| In the event of a bank failure, federal deposit insurance protects deposits that are payable in the United States. Deposits that are only payable overseas, and not in the United States, are not insured. |
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| Securities, mutual funds, and similar types of investments are not covered by deposit insurance. Creditors (other than depositors) and shareholders of a failed bank or savings association are not protected by federal deposit insurance. |
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| What types of deposits are insured? |
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| All types of deposits received by a financial institution in its usual course of business are insured. For example, savings deposits, checking deposits, deposits in NOW accounts, Christmas Club accounts, and time deposits (including certificates of deposit, which are sometimes called “CDs”) are all insured deposits. Cashiers’ checks, officers’ checks, expense checks, loan disbursement checks, interest checks, outstanding drafts, negotiable instruments and money orders drawn on the institution are also insured. Collectively, these types of instruments are referred to as “official checks.” Certified checks, letters of credit, and travelers’ checks, for which an insured depository institution is primarily liable, also are insured when issued in exchange for money or its equivalent, or for a charge against a deposit account. |
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| f I have deposits in several different FDIC-insured institutions, will my deposits be added together for insurance purposes? |
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| No. Deposits in different institutions are insured separately. But, if an institution has one or more branches, the main office and all branch offices are considered to be one institution. So, if you have deposits at the main office and at one or more branch offices of the same institution, the deposits are added together when calculating deposit insurance coverage. Financial institutions owned by the same holding company, but separately chartered, are separately insured. |
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| What is the amount of FDIC insurance coverage? |
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| The basic insured amount of a depositor is $100,000. Accrued interest through the date of the financial institution’s closing (failure) is included when calculating insurance coverage. |
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| Deposits maintained in different categories of legal ownership are separately insured. So, you can have more than $100,000 insurance coverage in a single institution. |
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| The most common categories of ownership are single (or individual) ownership, joint ownership, and testamentary accounts. Separate insurance is also available for funds held for retirement purposes, e.g., Individual Retirement Accounts, Keoghs, and pension or profit-sharing plans (see Questions 35, 36 and 37 in the original booklet). |
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| Can I increase FDIC insurance coverage by dividing my funds and depositing them into several different accounts? |
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| No. Federal deposit insurance is not determined on a per-account basis. You cannot increase FDIC insurance by dividing funds owned in the same ownership category among different accounts. The type of account – whether checking, savings, certificate of deposit, or outstanding official check such as a cashier’s check (see Question 4), or other form of deposit – has no bearing on the amount of insurance coverage. Furthermore, the use of Social Security numbers or tax identification numbers does not determine insurance coverage. |
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| How are funds deposited in Individual Retirement Accounts (IRAs) and Keoghs insured? |
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| IRA and Keogh funds are separately insured from any non-retirement funds the depositor may have at an institution. But IRA and self-directed Keogh funds will be added together, and the combined total will be insured up to $100,000. IRA and self-directed Keogh funds will also be aggregated with certain other retirement funds, namely, those belonging to other self-directed retirement plans, and those belonging to so-called “457 Plan” accounts, if the deposits are eligible for pass-through insurance (see Question 37). The “457 Plans” are deferred compensation plans conforming to section 457 of the Internal Revenue Code that are are established by state and local governments and nonprofit organizations. |
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| IRA and Keogh time deposits made before December 19, 1993, are insured separately from each other and from any other funds of the depositor. Such funds, however, become subject to the aggregation rules explained above when the deposits mature, roll over, or are renewed. |
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| Contact the FDIC |
| The FDIC maintains regional offices in Atlanta, Boston, Chicago, Dallas, Kansas City, Memphis, New York and San Francisco. Check your phone book for the appropriate number or call 800-934-3342 for the address of the regional office serving you. |
Federal Deposit Insurance Corporation
Division of Compliance and Consumer Affairs
550 17th Street, NW
Washington, D.C. 20429-9990 |
800-934-3342 or
800-925-4618 (TTD) |
| Email: Consumer@FDIC.gov |
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| Insurance information on the internet |
| To further help consumers and bankers learn about deposit insurance, and to provide information about the insurance coverage of specific groups of accounts, the FDIC has developed the Electronic Deposit Insurance Estimator (EDIE). The EDIE system is located on the FDIC’s Internet Web Site (www.fdic.gov) and consolidates all of the deposit insurance information available on the site in one easy-to-access location. |
| EDIE is an interactive Internet application that allows consumers or bankers to enter information about an account or group of accounts at an FDIC-insured institution, and receive back a report that states whether the funds are fully insured. If any funds are uninsured, EDIE will identify them and explain why the funds are not covered. A person does not need to know the deposit insurance rules in order to use EDIE. The program asks simple questions about the names (ownership) and balances of accounts, then furnishes a report. Assisting users along the way is a red-haired, green-eyed helper, “EDIE.” EDIE provides definitions of terms, examples, and other important information to make the system easy to use. To protect consumers’ privacy, no identifying information such as account numbers, Social Security numbers or bank names is asked. |
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| Notice |
| This page provides examples of insurance coverage under the Federal Deposit Insurance Corporation’s rules on certain types of accounts commonly held by depositors in insured banks and insured savings associations. The information provided on this page is presented in a nontechnical way and is not intended to be a legal interpretation of the FDIC’s laws and regulations on insurance coverage. For greater detail concerning the technical aspects of insurance coverage, depositors or their counsel may wish to consult the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) and the FDIC’s regulations relating to insurance coverage (12 C.F.R. Part 330). |
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| Items on this page have been saved in Adobe© Acrobat© for your convenience. It requires Version 4.0 or above. A link has been provided below if you are in need of this software. |
| Heritage Bank cannot guarantee the functionality of the software in the link below. We provide this link to you “as is,” and you agree to use it at your own risk. |
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This page is intended to provide the public with basic information about the FDIC and how it insures your accounts at Heritage. It is not intended to be a legal interpretation of the regulations and policies of any federal, state or local government entity or that of Heritage Bank of Central Illinois.
Originally produced by the Federal Deposit Insurance Corporation. |
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