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Account Ownership Categories
Self-Directed Retirement Accounts
(12 C.F.R. § 330.14(c)(2))
Definition
A self-directed retirement account is a retirement account for which the owner, not a plan administrator, has the right to direct how the funds are invested, including the ability to direct that the funds be deposited at a specific FDIC-insured bank.
This ownership category includes deposits of the following types of plans:
- Individual Retirement Accounts (IRAs), including Roth IRAs
- Simplified Employee Pension Accounts
- "Section 457" Deferred Compensation Plan Accounts
- Self-directed Keogh Plan Accounts
- Self-directed Defined Contribution Plan Accounts, primarily 401k plans
Note: All "Section 457" deferred compensation plan accounts regardless of whether they are self-directed or not, are included in this category of coverage.
A Coverdell Education Savings Account (formerly known as an Education IRA) is not insured as a self-directed retirement account. A Coverdell account does not involve retirement. It is a trust created for the purpose of paying the qualified education expenses of a designated beneficiary. A Coverdell account is insured as an irrevocable trust account.
Insurance Limit
All self-directed retirement funds owned by the same person in the same insured bank are added together and the total is insured up to $250,000.
Important!
Some self-directed retirement accounts, like IRAs, permit the owner to name one or more beneficiaries to the account. Naming beneficiaries does not increase the insurance coverage of these accounts.
| Account Title |
Balance |
| Bob Johnson’s Roth IRA |
$ 110,000 |
| Bob Johnson’s IRA |
75,000 |
| Total |
$ 185,000 |
| Amount Insured |
$ 185,000 |
Explanation: Since Bob's total in all self-directed retirement accounts at the same bank is less than the $250,000 insurance limit, his IRA deposits are fully insured.
| Account Title |
Balance |
| Barbara Moore’s Roth IRA |
$ 100,000 |
| Barbara Moore’s IRA |
180,000 |
| Total |
$ 280,000 |
| Amount Insured |
$ 250,000 |
| Amount Uninsured |
$ 30,000 |
Explanation: Since Barbara's total in all self-directed retirement accounts at the same bank exceeds the insurance limit for this ownership category, $250,000 is insured and $30,000 is uninsured.
Fiduciary accounts held for self-directed retirement funds
If self-directed retirement funds (for example, an IRA account) are deposited on behalf of an individual by a fiduciary such as a deposit broker, the funds in the account will be insured as the self-directed retirement funds of the principal, added to any other self-directed retirement accounts of the principal at the same bank, and insured up to $250,000.
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