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4000 - Advisory Opinions


A Simplified Employee Pension (SEP) is Treated as an IRA for Deposit Insurance Purposes

FDIC-91-61

July 29, 1991

Valerie J. Best, Counsel

I am writing in response to your letter regarding the deposit insurance coverage available for funds deposited in Individual Retirement Accounts. You ask if funds deposited in a SEP (simplified employee pension) would be aggregated with funds deposited in your regular IRA. Both the SEP and your regular IRA are maintained at the same FDIC-insured depository institution.

A SEP is treated as an IRA for deposit insurance purposes. All vested interests (excluding remainder interests) of any one person in a SEP and in a regular IRA are aggregated for purposes of determining deposit insurance coverage.

Under the FDIC's deposit insurance regulations, funds deposited in IRAs are insured separately from other types of deposit accounts held by the same depositor at the same institution. Consequently, funds deposited in all of an individual's IRAs (including SEPs) at one insured depository institution are added together and insured in the aggregate for a maximum of $100,000. Principal and interest earned are included when calculating insurance coverage. In the case of the accounts you listed (a SEP account and an IRA account), those accounts would be added together and the sum would be insured for a total of $100,000. Any amount of your combined SEP and IRA funds over $100,000 would be uninsured.

I hope this information is helpful to you. Please do not hesitate to contact us if we can be of further assistance.


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