FDIC insured funds: per person or per account?

[blahsome]

Hi, does anybody know whether the $100,000 FDIC limit apply to one person per bank, or one account per bank? How about joint accounts?

Thanks.

 

[AaronP]

per account. So, if you happen to have 500,000 that you want to put into a savings account, you should have 5 different accounts at different banks, and you will be covered for all of it.

Of course, our banking system is so strong, that if you put your money into a major national bank like Citibank, it will be totally safe, and if Citibank defaults, well then our nation is probably in the middle of world war III, and there are bigger problems than your money!!!

 

[rufruf44]

Per person. As for joint account, IIRC it will be insured under the primary holder of that account (the one listed for tax purpose).

 

[Imported]

I thought it was per account?

 

[BlueApple]

Link

10. What is the amount of FDIC insurance coverage?
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.

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.

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).

11. Can I increase FDIC insurance coverage by dividing my funds and depositing them into several different accounts?

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.

So I guess it is per person....

 

[AaronP]

hmm its always nice to know that the college I paid so much for fed me so much wrong info!

 

[dirtboy]

Per person.

 

[BlueApple]

Originally posted by: AaronP
hmm its always nice to know that the college I paid so much for fed me so much wrong info!

I was sure it was per account too until I saw their site

 

[kranky]

There are simple ways to overcome the $100,000 per person limitation, outlined right on the FDIC site here. I can have $100K as a sole account owner, my wife can have $100K as a sole account owner, and we can have $100K in a joint account, and all of it would be covered.

Anyway, the FDIC has a little interactive site that allows you to describe a situation and it will tell you if everything is covered. It's here.

 

[McPhreak]

The info that BlueApple posted doesn't mention anything about holding separate accounts in different institutions does it? Good ol' Suze Orman told me that you can split the money to different institutions and they will each individually be insured by the FDIC...

 

[NesuD]

Yup Kranky has it right. My wife is the operations manager at a local Credit Union and i just asked her. She said simply put it is "By ownership" so as Kranky said Our joint account is insured for 100k and so is her personal account as well as my personal account for a total of 300k between us. They are all considered different ownership.

 

[tcsenter]

hmm its always nice to know that the college I paid so much for fed me so much wrong info!

haha, that happens a lot, especially if you go to a liberal arts college.

$100,000 per "depositor", per category of legal ownership, per chartered institution. The type or number of accounts have no bearing on FDIC insurance coverage.

Category of ownership is the most important factor in determining insurance coverage. Funds belonging to the same category of ownership are not insured separately if held at the same institution. Funds belonging to different categories of ownership are insured separately if held at the same institution.

Examples of 'category of legal ownership' are single/individual ownership, joint ownership, and testamentary accounts. Retirement funds like IRA and Koeghs are insured separately from non-retirement funds, but still in many cases is limited to $100,000 per depositor. There are special rules for Roth IRA's, pension or profit sharing plans, and other category of ownership types.

Which means, you can have three individual ownership accounts (savings, checking, CD, flexible spending account, et al) each containing $100,000 at the same institution, and you're only insured for the first $100,000. If you have each of those accounts at a different institution, then you're insured for the full $300,000.

If you have funds in the same institution which fall under DIFFERENT categories of ownership, you are insured for $100,000 per category of ownership (per institution).

So PER INSTITUTION, you can conceivably be insured up to:

- the first $100K of all funds in non-retirement individual ownership accounts
- the first $100K of all funds in non-retirement joint-ownership accounts
- the first $100K of all funds in non-retirement testamentary accounts
- the first $100K of all retirement accounts

As I said there are some special rules for retirement accounts so you'd have to find more about that.

 

[glenn1]

"By ownership" so as Kranky said Our joint account is insured for 100k and so is her personal account as well as my personal account for a total of 300k between us. They are all considered different ownership.

Correct. And if you have enough that this becomes an issue, you can either look for an account which offers either SIPC (Securities Insurance Protection Corporation, the brokerage firm equivalent of FDIC) coverage, which is currently $500,000, or go with a firm that offers additional private, third party insurance coverage for assets above the current FDIC/SIPC coverage threshold. I work for a brokerage firm which shall remain nameless, but we have third party insurance that covers up to $25 million in assets, IIRC.

 

[tcsenter]

Correct. And if you have enough that this becomes an issue, you can either look for an account which offers either SIPC (Securities Insurance Protection Corporation, the brokerage firm equivalent of FDIC) coverage, which is currently $500,000

A few states such as Massachusetts have enacted their own secondary deposit insurance system (Depositors Insurance Fund). This depositors coverage is, IIRC, unlimited except the first $100K will be considered a 'deductible' of sorts, that which is already covered by the FDIC.

 

[PsychoAndy]

Originally posted by: NesuD
Yup Kranky has it right. My wife is the operations manager at a local Credit Union and i just asked her. She said simply put it is "By ownership" so as Kranky said Our joint account is insured for 100k and so is her personal account as well as my personal account for a total of 300k between us. They are all considered different ownership.

Not to threadcrap, but that dosent bring any new info to the thread. Corporate banks are governed by the FDIC. Credit Unions are governed by the NCUA.

Keep in mind that they are 2 very different institutions.

-PAB