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FDIC Consumer News - Fall 2001

Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

  Special Report on FDIC Insurance 

1. If you picked "False" you are correct.

PAYABLE-ON-DEATH (POD) AND OTHER REVOCABLE TRUST ACCOUNTS. The insurance rules governing these types of deposit accounts where funds pass to specific beneficiaries when the owner dies (sometimes also called testamentary, Totten trust or In-Trust-For accounts) can provide for expanded insurance coverage, but the rules also can be complicated. Each beneficiary's share of a POD account can be insured up to $100,000 ($200,000 if there are two beneficiaries, $300,000 if there are three, and so on) but the beneficiary must be a "qualifying" beneficiary. That is, the beneficiary must be the grantor/depositor's spouse, child, grandchild, parent or sibling. Other relatives, such as nieces, nephews, cousins or in-laws, as well as friends, do not qualify the account for the additional insurance coverage provided to other POD accounts. What happens if you name a non-qualifying beneficiary? The portion payable to that person would be added to any accounts you have at the bank in the single (or individual) account category and the total will be insured to $100,000. See full story...

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Last Updated 11/23/2001 communications@fdic.gov