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| On May 20, 2009, President Barack Obama signed the Helping Families Save Their Homes Act, which extends the temporary increase in the standard maximum deposit insurance amount (SMDIA) to $250,000 per depositor through December 31, 2013. This extension of the temporary $250,000 coverage limit became effective immediately upon the President's signature. The legislation provides that the SMDIA will return to $100,000 on January 1, 2014. |
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| We have compiled a list of the most commonly-asked questions about FDIC deposit insurance. 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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| If you have further questions, please visit the website www.myfdicinsurance.gov, call 1 (877) ASK-FDIC or you can visit any of our Heritage Bank branches for assistance in understanding FDIC insurance and what it covers. |
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| Key Questions: |
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| What is the FDIC? |
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| The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC's creation in 1933, no depositor has ever lost even one penny of FDIC-insured funds. |
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What types of accounts are eligible for FDIC insurance?
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| FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking, NOW, and savings accounts, money market deposit accounts and certificates of deposit (CDs) up to the insurance limit. |
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| The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if you purchased these products from an insured bank or savings association. |
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| How can I keep my deposits within the FDIC insurance limits? |
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| If you and your family have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage — your deposits are fully insured. A depositor can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements. In addition, federal law provides for insurance coverage of up to $250,000 for certain retirement accounts. |
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| What are the basic FDIC coverage limits? |
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| Single Accounts (owned by one person): $250,000 per owner |
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| Joint Accounts (two or more persons): $250,000 per co-owner |
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| IRAs and other certain retirement accounts: $250,000 per owner |
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| Revocable trust accounts: Each owner is insured up to $250,000 for the interests of each beneficiary, subject to specific limitations and requirements |
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| *These deposit insurance coverage limits refer to the total of all deposits that account holders have at each FDIC-insured bank. The listing above shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met. |
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| Is it possible to have more than $250,000 at one insured bank and still be fully covered? |
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| You may qualify for more than $250,000 in coverage at one insured bank or savings association if you own deposit accounts in different ownership categories. The most common account ownership categories for individual and family deposits are single accounts, joint accounts, revocable trust accounts and certain retirement accounts. |
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| What is a single account? |
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| This is a deposit account owned by one person and titled in that person's name only, with no beneficiaries. All of your single accounts at the same insured bank are added together and the total is insured up to $250,000. For example, if you have a checking account and a CD at the same insured bank, and both accounts are in your name only, the two accounts are added together and the total is insured up to $250,000. Note that retirement accounts and eligible trust accounts are not included in this ownership category. |
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| What is a joint account? |
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| This is a deposit account owned by two or more people and titled jointly in the co-owners' names only, with no beneficiaries. If all co-owners have equal rights to withdraw money from a joint account, a co-owner's shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000. Note that jointly owned revocable trust accounts are not included in this ownership category. |
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| If a couple has a joint checking account and a joint savings account at the same insured bank, each co-owner's shares of the two accounts are added together and insured up to $250,000 per owner, providing up to $500,000 in coverage for the couple's joint accounts. |
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| Example: John and Mary have three joint accounts totaling $600,000 at an insured bank. Under FDIC rules, each co-owner's share of each joint account is considered equal unless otherwise stated in the bank's records. John and Mary each own $300,000 in the joint account category, putting a total of $100,000 ($50,000 for each) over the insurance limit. |
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| Joint AccountExample |
| Account Title |
Type of Deposit |
Account Balance |
| Mary and John Smith |
Checking |
$50,000 |
| John or Mary Smith |
Savings |
$150,000 |
| Mary Smith or John Smith |
CD |
$400,000 |
| Total Deposits |
$600,000 |
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Insurance coverage for each owner is
calculated as follows: |
| Account Holders |
Ownership Share |
Amount Insured |
Amount Uninsured |
| John |
$300,000 |
$250,000 |
$50,000 |
| Mary |
$300,000 |
$250,000 |
$50,000 |
| Total |
$600,000 |
$500,000 |
$100,000 |
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Mary's ownership share in all joint accounts equals $300,000 [1/2 of the checking account ($25,000), 1/2 of the savings account ($75,000), and 1/2 of the CD ($200,000), for a total of $300,000]. Since her coverage in the joint ownership category is limited to $250,000, $50,000 is uninsured. |
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John's ownership share in all joint accounts is the same as Mary's, so $50,000 is uninsured. |
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| What is meant by certain retirement accounts? |
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| These are deposit accounts owned by one person and titled in the name of that person's retirement plan. Only the following types of retirement plans are insured in this ownership category: |
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Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs |
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Section 457 deferred compensation plan accounts (whether self-directed or not) |
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Self-directed defined contribution plan accounts |
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Self-directed Keogh plan (or H.R. 10 plan) accounts |
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| All deposits that an individual has in any of the types of retirement plans listed above at the same insured bank are added together and the total is insured up to $250,000. For example, if an individual has an IRA and a self-directed Keogh account at the same bank, the deposits in both accounts would be added together and insured up to $250,000. |
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| Note: Naming beneficiaries on a retirement account does not increase deposit insurance coverage. |
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| What is a revocable trust account? |
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| This is a deposit account held as a payable on death (POD) or in trust for (ITF) account or that is established in the name of a formal revocable trust (also known as a living or family trust account). |
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| POD and ITF accounts — also known as testamentary or Totten Trust accounts — are the most common form of revocable trust deposits. These informal revocable trusts are created when the account owner signs an agreement — usually part of the bank's signature card — stating that the deposits will be payable to one or more beneficiaries upon the owner's death. |
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| Living trusts — or family trusts — are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the deposits in the trust during his or her lifetime. The trust document sets forth who shall receive trust assets after the death of the owner. |
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| Deposit insurance coverage for revocable trust accounts is provided to the owner of the trust. However, the amount of coverage is based on the number of beneficiaries named in the trust and, in some cases, the interests allocated to those beneficiaries, up to the insurance limit. A trust beneficiary can be an individual (regardless of the relationship to the owner), a charity or another non-profit organization (as defined by the IRS). |
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| Revocable trust coverage is based on all revocable trust deposits held by the same owner at the same bank, whether formal or informal. If a revocable trust account has more than one owner, each owner's coverage is calculated separately, using the following rules: |
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Revocable Trust Deposits with Five or Fewer Beneficiaries — Each owner's share of revocable trust deposits is insured up to $250,000 for each beneficiary (i.e., $250,000 times the number of different beneficiaries), regardless of actual interest provided to beneficiaries. |
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Revocable Trust Deposits with Six or More Beneficiaries — Each owner's share of revocable trust deposits is insured for the greater of either (1) coverage based on each beneficiary's actual interest in the revocable trust deposits, with no beneficiary's interest to be insured for more than $250,000, or (2) $1,250,000. |
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| Note: Determining coverage for living trust accounts that have six or more beneficiaries and provide different interests for the trust beneficiaries can be complicated. Contact the FDIC at 1-877-275-3342 if you need assistance in determining the insurance coverage of your revocable trust. |
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| POD Account Example: This example applies to POD accounts only. (Coverage may be different for some living trusts.) Bill has a $250,000 POD account with his wife Sue as beneficiary. Sue has a $250,000 POD account with Bill as beneficiary. In addition, Bill and Sue jointly have a $1,500,000 POD account with their three children as equal beneficiaries. |
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| Account Title |
Account Balance |
Amount Insured |
Amount Uninsured |
| Bill POD to Sue |
$250,000 |
$250,000 |
$0 |
| Sue POD to Bill |
$250,000 |
$250,000 |
$0 |
| Bill and Sue POD to 3 children |
$1,500,000 |
$1,500,000 |
$0 |
| Total |
$2,000,000 |
$2,000,000 |
$0 |
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| These three accounts totaling $2,000,000 are fully insured because each owner is entitled to $250,000 of coverage for each beneficiary. Bill has $1,000,000 of insurance coverage because he names four beneficiaries — his wife in the first account and his three children in the third account). Sue also has $1,000,000 of insurance coverage $250,000 for each of her beneficiaries — her husband in the second account and her three children in the third account. |
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| When calculating coverage for revocable trust accounts, keep in mind that: |
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Coverage is based on the number of beneficiaries (and, if the account has six or more beneficiaries, the interests of the beneficiaries) named by each owner. Additional coverage is not provided for the trust owner(s). For example, if a father owns a $750,000 POD account naming his two sons as beneficiaries, the account is insured for $500,000 — $250,000 for the interest of each beneficiary. The remaining $250,000 is uninsured. |
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FDIC insurance limits apply to all revocable trust deposits — including all POD/ITF and living trust accounts — that a trust owner has at one insured bank. In applying the $250,000 per beneficiary insurance limit, the FDIC combines an owner's POD accounts with the living trust accounts that name the same beneficiaries at the same bank. |
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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 at www.FDIC.gov/EDIE 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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