Customers of FDIC-insured banks are insured up to $250,000 per depositor, per FDIC-insured bank, per ownership category. This means that depending on the different types of accounts you hold, and how many different FDIC-insured banks you bank with, you could be eligible for more than $250,000 in coverage. Here’s a breakdown of the different ownership categories and how FDIC insurance coverage is calculated for each one.
- Single Accounts
A single account is owned by one person without named beneficiaries. The balances of all single accounts owned by the same person at the same bank are added together and insured up to $250,000.
Example: Let’s assume that at Bank A you are the single owner of a checking account with a $5,000 balance, a savings account with a $45,000 balance, and a money market account with a $200,000 balance.
Then, at Bank B you have another money market account with a $260,000 balance. In this scenario, you would be insured for $250,000 at Bank A and at Bank B you would be insured for another $250,000 but uninsured for the remaining $10,000 in balances that are over the coverage limit.
Note: By designating beneficiaries to single and joint accounts (frequently referred to as a Payable on Death “POD” designation), you can increase the insured balance of an account. If your account balances exceed the single account limit, please refer to the FDIC guidelines for more information.
- Joint Accounts
A joint account is a deposit account owned by two or more people at the same bank with no beneficiaries. Each co-owner’s share of all joint accounts at the same bank are added together and insured up to $250,000.
Example: At Bank A, if you are an equal joint owner with no beneficiaries of Account 1 with a balance of $250,000 and an equal joint owner of Account 2 with a balance of $300,000, your total share between the two accounts adds up to $275,000 (300,000 + $250,000/2). This means that $250,000 of your share of joint accounts at Bank A would be FDIC insured and $25,000 would be uninsured.
If you are also a joint owner with no beneficiaries on accounts at other FDIC-insured banks, your share of all joint accounts at each bank would be insured up to $250,000 per bank.
Note: By designating beneficiaries to single and joint accounts (frequently referred to as a Payable on Death “POD” designation), you can increase the insured balance of an account. If your account balances exceed the joint account limit, please refer to the FDIC guidelines for more information.
- Self-Directed Retirement Accounts
A self-directed retirement account is an individual retirement account or a self-directed defined contribution plan such as a 401k, an IRA, or profit-sharing plan. The balances of all self-directed retirement accounts for the same person at the same bank are added to together and insured up to $250,000.
Example: If you had $100,000 in an IRA account and $85,000 in a self-directed profit-sharing plan at the same bank, your total balances of $185,000 would be fully insured.
As with single accounts and joint accounts, any combined balances in self-directed retirement accounts that you hold with other FDIC-insured banks would be insured up to $250,000 per bank.
- Trust Accounts & Employee Benefit Accounts
Less commonly used personal accounts include trust accounts and employee benefit plans. The Insurance rules and limits for these types of accounts are more complex and take several factors into consideration. For more information on insurance rules for trusts and employee benefit plans, visit the FDIC’s Electronic Deposit Insurance Estimator.