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FDIC Consumer News - Spring 1999

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.

4. Sorry, that is incorrect.

The correct answer is "True." Your payable-on-death accounts (also called testamentary, Totten trust or "In Trust For" accounts) are insured separately from your individual or joint accounts at the same institution, but only if certain conditions are met. One of these conditions is that the beneficiaries of the account must be the owner's spouse, children, grandchildren, parents or siblings (called "qualifying beneficiaries"). Parents and siblings were added to this list on April 1, 1999. If this requirement and the other requirements are satisfied, the account will be insured up to $100,000 for each beneficiary. For example, a POD account with three qualifying beneficiaries could be insured up to $300,000 (combined with any other POD accounts held by the account owner for the same beneficiaries). The list of qualifying beneficiaries also includes adopted children, adoptive parents, brothers and sisters through adoption, stepchildren, stepparents, stepbrothers and stepsisters. The list does not include cousins, aunts, uncles, nieces, nephews, friends or in-laws. This means a $300,000 POD account for three non-qualifying beneficiaries would be added to any other individual accounts the owner held at the bank and would be insured to only $100,000 in total.

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Last Updated 07/28/1999 communications@fdic.gov