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Coverage can vary on FDIC-insured accounts

You’re familiar with FDIC (Federal Deposit Insurance Corp.) protection for FDIC-insured bank accounts. But did you know insurance varies based on account ownership?

The FDIC steps in when an FDIC-insured bank goes out of business, up to a limit. (See a list of 2017 bank failures at, and to see if your bank is FDIC-insured, go to

The current limit is $250,000 per depositor — but more may be covered based on ownership rules.

Say “Jane Doe” has a $400,000 deposit at her FDIC-insured bank. She wants to know if she can set up a separate account at the same bank to have the full amount covered. What if she keeps $250,000 in her existing account and moves the rest into a new account “in trust for” her son, John Jr., an idea suggested by her banker. Would that work?

In this case, each account is fully covered up to $250,000, according to an FDIC spokesperson and confirmed by using the FDIC’s online tool

Here is how the tool works: Jane would enter the bank’s name and indicate that it’s her personal account. For ownership type — this is key — she’ll choose from these choices: Single, no beneficiaries; Joint, no beneficiaries; POD/ITF, with beneficiaries; Living Trust; IRA; and Other.

In this case, the $250,000 account is single, no beneficiaries. The new account is POD/ITF (POD stands for “Payable on Death,” and ITF stands for “In Trust For”). Then Jane enters her name as the owner and checks the box that says the owner is living. (For “Account Nickname,” she can choose anything she likes, such as “Account No. 1.”) Then she would enter the account balance ($250,000) and the deposit type (in this case “demand deposit”). Then she would click “add to report.”

Jane would repeat the same for the second account, only now the ownership type is POD/ITF with beneficiaries. Jane indicates that she is the owner, adding the beneficiary’s name (John Jr.), type (“Person”) and that the beneficiary is living. She would fill out the rest of the form as before, then click “add to report.”

Since Jane has no other accounts at this bank, she’s done. Now she can print out or review the report to confirm her understanding of what is — and is not — FDIC-insured. And in this case, both accounts are fully insured.

That’s one example. I’ve included additional examples on my website,

Here are a few more points:

To be eligible, the beneficiary must be a living person, a charity or a nonprofit organization. If a charity or nonprofit organization is named as beneficiary, it must qualify as such under Internal Revenue Service regulations. The beneficiary must be identified by name in the bank’s deposit account records.

Since 2010, joint accounts are insured up to $250,000 per owner, which means that a joint account between spouses would be insured up to $500,000. Should your spouse die, after six months a joint account will be deemed to be your individual account.

For more information, contact the FDIC at 877-ASK-FDIC, or visit

Julie Jason is a personal money manager at Jackson, Grant of Stamford, Conn., and an awardwinning author. Contact her at

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