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Important Notice About FDIC Coverage of Accounts
New Regulations effective in April, 1999, simplify and in some cases,
exapand 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, so we encourage you to review this information carefully to
determine if there are any changes you may want to make in your accounts to get the maximum coverage
allowed.
Be Sure Where You Stand
Although the FDIC has simplified deposit insurance coverage somewhat by these changes, it can still be very confusing.
We encourage you to visit with one of our representatives if you have questions on these changes or on the FDIC coverage of your accounts here.
For official and up-to-date FDIC information, please visit their website at http://www.fdic.gov
• Possible Account Arrangements
• Joint Accounts
• Revocable Trust Accounts
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Possible Account Arrangements
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How Husband and
Wife May Have
Insured Accounts
Totaling $600,000 |
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Individual Accounts: |
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Husband |
$100,000 |
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Wife |
$100,000 |
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Joint Accounts: |
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Husband & Wife |
$200,000 |
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Revocable Trust |
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Husband as Trustee for Wife |
$100,000 |
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Wife as Trustee for Husband |
$100,000 |
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$600,000 |
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How a Grandparent and Two Grandchildren May Have Insured Accounts Totaling $1,000,000 |
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| Individual
Accounts: |
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| Grandparent |
$100,000 |
| Grandchild
Number One, |
$100,000 |
| Grandchild
Number Two |
$100,000 |
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| Joint
Accounts: |
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Grandparent
and
Grandchild Number One, |
$100,000 |
Grandparent
and
Grandchild Number Two |
$100,000 |
Child Number
One, and
Child Number Two |
$100,000 |
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| Revocable
Trust Accounts: |
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Grandparent
and Trustee for
Grandchild Number One, |
$100,000 |
Grandparent
and, Trustee for
Grandchild Number Two |
$100,000 |
Grandchild
Number 1 and Trustee for
Grandchild Number Two |
$100,000 |
Grandchild
Number Two and, Trustee for
Grandchild Number One. |
$100,000 |
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$1,000,000 |
The
same grouping of insured accounts can be arranged for a parent and two
children, instead of for a grandparent and two grandchildren.
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| How a Husband, Wife and One Child May Have Insured Accounts Totaling $1,200,000 |
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| Individual Accounts: |
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| Husband |
$100,000 |
| Wife |
$100,000 |
| Child |
$100,000 |
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| Joint Accounts: |
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| Husband
and Wife |
$100,000 |
| Husband and Child |
$100,000 |
| Wife arid Child |
$100,000 |
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| Revocable Trusts: |
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| Husband
as Trustee for Wife |
$100,000 |
| Hu6band
as Trustee for Child |
$100,000 |
| Wife
as Trustee for Hu6band |
$100,000 |
| Wife
as Trustee for Child |
$100,000 |
| Child
as Trustee for Father |
$100,000 |
| Child
as Trustee for Mother |
$100,000 |
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$1,200,000 |
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| How Husband, Wife and Two Children May Have Insured Accounts Totaling $2,000,000 |
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| Individual Accounts: |
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| Husband |
$100,000 |
| Wife |
$100,000 |
| Child Number One |
$100,000 |
| Child Number Two |
$100,000 |
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| Joint Accounts: |
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| Husband and Wife |
$100,000 |
| Husband and Child Number One |
$100,000 |
| Wife and Child Number Two |
$100,000 |
| Child Number One and Child Number Two |
$100,000 |
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| Revocable Trust Accounts: |
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| Husband go Trustee for Wife |
$100,000 |
Husband go Trustee for
Child Number One |
$100,000 |
Husband and Trustee for
Child Number Two |
$100,000 |
| Wife and Trustee for Husband |
$100,000 |
Wife and Trustee for
Child Number One |
$100,000 |
Wife and Trustee for
Child Number Two |
$100,000 |
Child Number One and Trustee for
Child Number Two |
$100,000 |
Child Number Two and Trustee for
Child Number One |
$100,000 |
| Child Number One as Trustee for Father |
$100,000 |
| Child Number One and Trustee
for Mother |
$100,000 |
| Child Number Two and Trustee for Father |
$100,000 |
| Child Number Two ac
Trustee for Mother |
$100,000 |
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$2,000,000 |
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ABOUT RETIREMENT ACCOUNTS
In addition to the coverage shown in the charts above, the aggregated amount in Individual
Retirement Account, Self-directed Keoph accounts "457 Plan";
account and certain self-directed defined contribution plan accounts
is eligible for separate insurance protection up to $100,000.
Retirement accounts are not included in the chart above because they are
subject to special rules governing deposit and withdrawal of funds.
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SPECIAL NOTES AB0UT REVOCABLE TRUST ACCOUNTS OF ONE GRANDPARENT FOR THE OTHER
Grandparents must be married to each other in order for the revocable
trust accounts of one for the other to be separately insured.
ABOUT FDIC SANCTION Of THE INFORMATION IN THIS BROCHURE
The FDIC cannot officially sanction and approve this brochure, because
the examples, although generally accurate, are designed to simplify in layman'
terms, rather complex rules that in some circumstances may only be fully
understood in the statutory and regulatory context in which they were I written. |
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How Grandfather,
Grandmother and a
Grandchild May Have
Insured Accounts
Totaling $1,000,000 |
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Individual Accounts: |
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Grandfather |
$100,000 |
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Grandmother |
$100,000 |
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Grandchild |
$100,000 |
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Joint Accounts: |
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Grandfather and Grandmother |
$100,000 |
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Grandfather and Grandchild |
$100,000 |
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Grandmother and Grandchild |
$100,000 |
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Revocable Trust Accounts: |
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Grandfather as Trustee for Grandmother |
$100,000 |
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Grandfather as Trustee for Grandchild |
$100,000 |
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Grandmother as Trustee for Grandfather |
$100,000 |
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Grandmother as Trustee for Grandchild |
$100,000 |
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$1,000,000 |
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Joint Accounts
Under prior regulations, there was a two-step process used to determine coverage of joint accounts, in the first
step, all joint accounts owned by the same combinations of persons in the same insured to a maximum of $100,000.
In the second step, each person's interest in all joint accounts, whether owned by the same or different combinations of
persons was insured to a maximum of $100,000. For example, accounts owned jointly by a husband and wife could only have
a maximum of $100,000 coverage at teh same insured institution, whether it was in one account or multiple accounts. However,
they were each still eligible to have up to $50,000 covered in interest in other joint accounts with other
persons, since they each had only $50,000 interst in their jointly owned accounts. So, using this same example,
the husband could have a joint account with another person and have up to $50,000 covered interest in the account,
assuming he had no other joint accounts with other persons at the same insured institution.
The change is that the first step has been eliminated, the second step remains. The new regulation allows for each individual
to have their full $100,000 coverage in joint accounts owned by the same combination of persons. Using the same example as above,
this means that a husband and wife could have one or more accounts at the same insured institution covered for an aggregate maximum
of $200,000, with each person's interest deemed to be $100,000. (In this example, the husband and wife would not be eligible for any
deposit insurance coverage for joint accounts they may have with other persons at the same insured institution.)
As before, a depositor's ownership in joint accounts will be covered up to $100,000 seperately and in addition to the coverage available
for other types of consumer accounts, such as individual accounts, revocable trust accounts and retirement accounts.
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Revocable Trust Accounts
Revocable trust accounts (commonly called "payable on death" or POD accounts) are insured separately from other accounts held by the owners
or beneficiaries at the same insured institution. There are several conditions that must be met in order to qualify as one of these accounts:
1) the beneficiaries must be a qualifying family member (prior regulation limited this to spouse, children and grandchildren) and 2) the
beneficiaries must be specifically named in the account records, and 3) the title of the account must include a term such as "in trust for"
or "payable on death to", and 4) the intention of the owner must be that the account will belong to the named beneficiary upon the owner's death.
The deposit insurance coverage of these accounts is applied for each beneficiary, rather than the owner, so each qualified beneficiary is entitled
to $100,000 coverage.
The revised regulation expands the list of family members that are eligible to be qualified beneficiaries to include siblings and parents.
Therefore, this change would only affect those wanting to establish revocable trust accounts for their brothers, sisters or parents.
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Contact Information
Jan McSwain - 580-724-3511 / 405-533-3737 / jmcswain@citizensstatebank.net
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