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Examples of Insurance Coverage of Groups of Accounts
As described in this Employee's Guide, FDIC deposit insurance coverage is determined according to how the funds are owned (right and capacity). Deposits held in a bank in the same right and capacity (which means legal ownership such as single, joint, trust, IRA) are added together and insured up to $100,000, including principal and any earned interest. This chapter provides several examples of the insurance coverage provided for funds owned by the same depositor(s) in more than one ownership category.
Important!
There are specific requirements that must be met for deposits to be separately insured in each ownership category. These requirements are set forth in the regulations and in this Employee's Guide. The examples provided in this chapter assume all account owners and any beneficiaries are alive when the bank fails.
This example illustrates how depositors can have more than the basic insurance amount in a bank in different ownership categories and have all deposits fully insured.
| Account |
Owners |
Ownership Category |
Balance |
| 1
|
Eric & Kate Boyd
|
Joint
|
$200,000
|
| 2
|
Eric & Kate Boyd POD
Michael, Karen, and Bob (children)
|
Revocable Trust
|
600,000
|
| 3
|
Eric Boyd POD Kate Boyd (spouse)
|
Revocable Trust
|
100,000
|
| 4
|
Kate Boyd POD Eric Boyd (spouse)
|
Revocable Trust
|
100,000
|
| 5
|
Eric Boyd IRA
|
Retirement
|
250,000
|
| 6
|
Kate Boyd IRA
|
Retirement
|
250,000
|
|
|
Total
|
|
$1,500,000
|
Summary of Coverage:
| Joint Account Category: |
| Owner
|
Ownership Share
|
Insured Amount
|
Uninsured Amount
|
| Eric
|
½ of Account #1 ($100,000)
|
$100,000
|
-0-
|
| Kate
|
½ of Account #1 ($100,000)
|
100,000
|
-0-
|
| Total Joint Account Coverage:
|
$200,000
|
-0-
|
| Revocable Trust Category: |
| Account |
Owner to Beneficiary |
Insured Amount |
Uninsured Amount |
| 2 |
Eric Boyd POD Michael (child) |
$100,000 |
-0- |
| 2 |
Eric Boyd POD Karen (child) |
100,000 |
-0- |
| 2 |
Eric Boyd POD Bob (child) |
100,000 |
-0- |
| 2 |
Kate Boyd POD Michael (child) |
100,000 |
-0- |
| 2 |
Kate Boyd POD Karen (child) |
100,000 |
-0- |
| 2 |
Kate Boyd POD Bob (child) |
100,000 |
-0- |
| 3 |
Eric Boyd POD Kate Boyd (spouse) |
100,000 |
-0- |
| 4 |
Kate Boyd POD Eric Boyd (spouse) |
100,000 |
-0- |
| Total Revocable Trust Account Coverage: |
$800,000 |
-0- |
| Retirement Account Category: |
| Account
|
Owners
|
Insured Amount
|
Uninsured Amount
|
| 5 |
Eric Boyd IRA |
$250,000 |
-0- |
| 6 |
Kate Boyd IRA |
250,000 |
-0- |
| Total Retirement Account Coverage: |
$500,000 |
-0- |
| |
Insured Amount |
Uninsured Amount |
| Total for Account Group # 1 |
$1,500,000 |
-0- |
This example illustrates insurance coverage involving a combination of both corporate and personal deposit accounts.
| Account |
Owners |
Ownership Category |
Balance |
| 1
|
Karl Smith & Judy Smith
|
Joint
|
$150,000
|
| 2
|
Karl Smith & Bill Smith
|
Joint
|
150,000
|
| 3
|
Bois Blanc Landscaping, Inc.,
Karl & Bill Smith (owners)
|
Corporation, Partnership and Unincorporated Association
|
100,000
|
|
|
Total
|
|
$400,000
|
Summary of Coverage:
| Joint Account Category: |
| Owner |
Ownership Share |
Insured Amount |
Uninsured Amount |
| Karl
|
½ of Account 1 ($75,000) &
½ of Account 2 ($75,000)
|
$100,000
|
$50,000
|
| Judy
|
½ of Account 1 ($75,000)
|
75,000
|
-0-
|
| Bill
|
½ of Account 2 ($75,000)
|
75,000
|
-0-
|
| Total Joint Account Coverage:
|
$250,000
|
$50,000
|
| Corporate, Partnership, & Unincorporated Association Account Category: |
| Account |
Company Name |
Insured Amount |
Uninsured Amount |
|
3
|
Bois Blanc Landscaping, Inc.
|
$100,000
|
-0-
|
| Total Corporate, Partnership, & Unincorporated Association Account Coverage: |
$100,000 |
-0- |
| |
Insured |
Uninsured |
|---|
| Total for Account Group # 2 |
$350,000
|
$50,000
|
Explanation: All accounts are fully insured, except the deposits attributable to Karl. Since Karl is a co-owner of two joint accounts, his share (50%) of each account is added together and the total ($150,000) is insured up to $100,000 and $50,000 is uninsured. Corporate deposits are insured separately from the personal funds of the owners.
This example illustrates the effect of depositing funds in POD (revocable trust) accounts with non-qualifying beneficiaries and the effect of aggregation with other single account deposits.
| Account |
Owners |
Ownership Category |
Balance |
| 1
|
Jeff Jones & Dan Smith
|
Joint
|
$200,000
|
| 2
|
Jeff Jones POD Dan Smith (friend)
|
Revocable Trust
|
100,000
|
| 3
|
Dan Smith POD Jeff Jones (friend)
|
Revocable Trust
|
100,000
|
| 4
|
Jeff Jones
|
Single
|
5,000
|
|
|
Total
|
|
$405,000
|
Summary of Coverage:
| Joint Account Category: |
| Owner |
Ownership Share |
Insured Amount |
Uninsured Amount |
| Jeff
|
½ of Account 1 ($100,000)
|
$100,000
|
-0-
|
| Dan
|
½ of Account 1 ($100,000)
|
100,000
|
-0-
|
| Total Joint Account Coverage:
|
$200,000
|
-0-
|
| Revocable Trust Category: |
| Account |
Owner to Beneficiary |
|
2
|
Jeff Jones POD Dan Smith (friend) *
|
|
3
|
Dan Smith POD Jeff Jones (friend) *
|
|
|
*Neither of these accounts name a qualifying beneficiary, so all the funds revert to the single account category for each owner. See below.
|
| Single Account Category: |
| Owner |
Ownership Share |
Insured Amount |
Uninsured Amount |
| Jeff
|
Account 2 ($100,000) &
Account 4 ($5,000)
|
$100,000
|
$5,000
|
| Dan
|
Account 3 ($100,000)
|
100,000
|
-0-
|
| Total Single Account Coverage:
|
$200,000
|
$5,000
|
| |
Insured |
Uninsured |
|---|
| Total for Account Group # 3 |
$400,000
|
$5,000
|
Explanation: Since Jeff and Dan each name a non-qualifying beneficiary (friend) on their payable on death accounts, these deposits are insured as their single accounts. Jeff's other single account for $5,000 is added to his payable on death account that does not qualify under the revocable trust category, and the total is insured up to $100,000. Their joint account is fully insured.
This example illustrates how to calculate insurance coverage for revocable trust accounts with a combination of both qualifying and non-qualifying beneficiaries and the effect of aggregation with other single accounts.
| Account |
Owners |
Ownership Category |
Balance |
| 1
|
Mary Parker POD Tommy Moore (nephew)
|
Revocable Trust
|
$100,000
|
| 2
|
Mary Parker POD Sally Moore (sister) and Tommy Moore (nephew)
|
Revocable Trust
|
100,000
|
| 3
|
Mary Parker
|
Single
|
$50,000
|
| 4
|
Mary and John Parker
|
Joint
|
200,000
|
| 5
|
Mary Parker, Roth IRA
|
Retirement
|
175,000
|
| 6
|
Mary Parker, IRA
|
Retirement
|
100,000
|
|
|
Total
|
|
$725,000
|
Summary of Coverage:
| Revocable Trust Category: |
| Account |
Owner to Beneficiary |
Balance |
Insured Amount |
Uninsured Amount
|
| 1
|
Mary POD Tommy |
$100,000
|
-0-
|
**
|
| 2
|
Mary POD Sally (50%)
|
$50,000
|
$50,000
|
-0-
|
| 2
|
Mary POD Tommy (50%)
|
$50,000
|
-0-
|
**
|
| Total Revocable Trust Account Coverage:
|
$200,000 |
$50,000 |
** |
|
**Accounts 1 and 2 both name a non-qualifying beneficiary (nephew). Therefore, the funds payable on death to that beneficiary (Tommy) revert to the single account category and are added to Mary's other single account to determine insurance coverage.
|
| Single Account Category: |
| Account |
Ownership Share |
Balance |
Insured Amount |
Uninsured Amount |
| 1 |
Mary POD Tommy (100%) ** |
$100,000 |
$100,000 |
-0- |
| 2 |
Mary POD Tommy (50%) ** |
50,000 |
-0- |
$50,000 |
| 3 |
Mary |
50,000 |
-0- |
50,000 |
| Total Single Account Coverage: |
$200,000 |
$100,000 |
$100,000 |
| Joint Account Category: |
| Owner |
Ownership Share |
Balance |
Insured Amount |
Uninsured Amount |
| Mary |
½ of Account 4 ($100,000) |
$100,000 |
$100,000 |
-0- |
| John |
½ of Account 4 ($100,000) |
100,000 |
100,000 |
-0- |
| Total Joint Account Coverage: |
$200,000 |
$200,000 |
-0- |
| Retirement Account Category: |
| Account |
Owner |
Balance |
Insured Amount |
Uninsured Amount |
| 5 |
Mary Parker's Roth IRA |
$175,000 |
175,000 |
-0- |
| 6 |
Mary Parker's IRA |
100,000 |
75,000 |
25,000 |
| Total Retirement Account Coverage: |
$275,000 |
$250,000 |
$25,000 |
| Total for Account Group 4 |
$725,000 |
$600,000 |
$125,000 |
Explanation: Account 1, which is a POD account naming Mary's nephew as the sole beneficiary, is insured in the single account ownership category because Mary's nephew is not a qualifying beneficiary. POD deposits attributable to non-qualifying beneficiaries are always insured as the owner's single account funds. The portion of Account 2 attributable to Mary's sister, Sally, is insured in the revocable trust category because Sally is a qualifying beneficiary. The portion of Account 2 attributable to Tommy, Mary's nephew, is insured in the single account ownership category because the nephew is a non-qualifying beneficiary. Therefore, Account 1 and the non-qualifying portion of Account 2 will be insured as Mary's single accounts, which will be added to the funds she has in Account 3. The total of Mary's single account funds is $200,000, of which $100,000 is insured and $100,000 is uninsured.
Mary and John's joint account is fully insured up to $200,000. Mary's two IRA accounts are added together totaling $275,000. Since the maximum insurance coverage in the IRA category is $250,000 per owner, she has $25,000 uninsured.
This example illustrates how sole proprietorship deposits are not separately insured from other single accounts of the owner. Also, depositors opening multiple revocable trust accounts need to ensure that the total amount between the owner and a qualifying beneficiary does not exceed $100,000.
| Account |
Owners |
Ownership Category |
Balance |
| 1
|
Hank Thomas
|
Single
|
$15,000
|
| 2
|
Hank Thomas dba Hank's Collectibles (a sole proprietorship)
|
Single
|
90,000
|
| 3
|
Hank and Paula Thomas POD
Greg (son)
|
Revocable Trust
|
200,000
|
| 4
|
Hank Thomas POD
Greg (son) and Billy (grandson)
|
Revocable Trust
|
100,000
|
|
|
Total
|
|
$405,000
|
Summary of Coverage:
| Single Account Category: |
| Account |
Owner |
Balance |
Insured Amount |
Uninsured Amount |
| 1 |
Hank Thomas |
$15,000 |
$15,000 |
-0- |
| 2 |
Hank Thomas dba Hank's Collectibles |
90,000 |
85,000 |
5,000 |
| Total Single Account Coverage: |
$105,000 |
$100,000 |
$5,000 |
| Revocable Trust Category: |
| Owner to Beneficiary
|
Balance
|
Insured Amount
|
Uninsured Amount
|
| Hank POD Greg (son) — 50% of Account 3 &
50% of Account 4
|
$150,000
|
$100,000
|
$50,000
|
| Paula POD Greg (son ) — 50% of Account 3
|
100,000
|
100,000
|
-0-
|
| Hank POD Billy (grandson) — 50% of Account 4
|
50,000
|
50,000
|
-0-
|
| Total Revocable Trust Account Coverage:
|
$300,000
|
$250,000
|
$50,000
|
| Total Coverage for Account Group #5
|
$405,000
|
$350,000
|
$55,000
|
Explanation: Deposits held in the name of a business that is a sole proprietorship are not separately insured from the single account funds of the owner of the business. Hank's sole proprietorship account and his other single account total $105,000. Therefore, $100,000 is insured and $5,000 is uninsured. The funds that Hank has payable on death to Greg in the account he co-owns with Paula (Account 3) are added together with the funds he has payable on death to Greg in the account he owns alone (Account 4). The owner of payable on death deposits is insured up to $100,000 per qualifying beneficiary. The total payable on death to Greg in these two accounts is $150,000, so $100,000 is insured and $50,000 is uninsured.
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