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FDIC Consumer News

Summer 2015

Dear FDIC: More Answers to Consumer Questions About Deposit Insurance

En Español

The FDIC is known to generations of consumers for protecting deposits in banks and savings institutions. More importantly, no depositor has ever lost a penny of insured deposits at an FDIC-insured institution. FDIC staff answer more than 20,000 questions each year from depositors and bankers who ask about the deposit insurance rules to ensure that accounts are correctly structured and the money is fully insured. Here are answers to two commonly asked questions we believe FDIC Consumer News readers will find useful.

I understood that the basic FDIC deposit insurance coverage is $250,000 for each account, but a friend said the basic coverage is $250,000 for each depositor at each bank. Who is correct?

Your friend is correct. In determining deposit insurance coverage, the FDIC will add together all the deposits an individual has at a bank in each of several "ownership categories" — such as single accounts, joint accounts, and certain retirement accounts — and insures that person's total deposits in each category up to at least $250,000.

I am elderly and I have a revocable living trust that names my three children as beneficiaries. All three children live far away from me, but I have a niece who lives nearby and comes to check on me. I would like to leave her some money when I pass away, but I would like to have the use of the money until then. What might be a good option?

You could establish a payable-on-death account, also commonly known as a "POD" account, that would be owned by you and that would name your niece as beneficiary when you die. While you are alive, you — and not your niece — would have full ownership and use of the money. And under the FDIC's rules, the deposits in the POD account (which is a type of revocable trust account) would be separately insured for up to $250,000 from the deposits in your revocable living trust because there are different beneficiaries.

You can learn more about FDIC deposit insurance coverage by calling us at 1-877-ASK FDIC (1-877-275-3342) or visiting For the hearing-impaired, please call 1-800-925-4618. Also visit the FDIC online for more information on deposit insurance, including publications, videos, our interactive Electronic Deposit Insurance Estimator (EDIE), and BankFind (a tool for determining if your bank is FDIC-insured).