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FDIC: The more you know, the safer your money. EDIE the Estimator

Glossary

Disclaimer: The following definitions or terms in this glossary have been provided solely to describe their use consistent with FDIC deposit insurance coverage. Some words or terms, especially those that are common in legal usage, may have different or additional definitions outside of this context.

A

Account Balance: The dollar amount including principal and interest for a specific account.

Account Category: A specific form of account ownership as set forth in the FDIC deposit insurance regulations. When the requirements for each ownership category are met, the deposits held in an ownership category receive separate FDIC insurance coverage. The most common ownership categories are: single; certain retirement; joint; revocable trust; irrevocable trust; employee benefit plan; corporation, partnership and unincorporated association; and public unit. Also called Ownership Category.

Account Owner: The owner of the funds deposited into an account at an FDIC-insured bank. An account owner is an individual, business/organization, or government entity. The account owner is the insured party on a deposit account.

Account Records: Account records include signature cards, certificates of deposit (CDs), passbooks, account ledgers, and computer records that relate to the bank's deposit-taking function. Also called Bank Account Records and Deposit Account Records.

Account Type: The deposit instrument (e.g., passbook savings, checking, CD) into which funds are deposited.

Agent: An individual authorized to act on behalf of another person or entity, the principal.

Agent Account: An account established by an individual or legal entity on behalf of the owner of the funds—See also Fiduciary Account, Power of Attorney, and Brokered CD.

Annuity: A contract underwritten by an insurance company that guarantees income in exchange for a lump sum or periodic payment.

Ascertainable Interest: A participant's share in a trust or employee benefit plan that is determinable without contingencies.

Assessments: The insurance premiums paid by FDIC-insured institutions.

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B

Bank Account Records: Bank account records include signature cards, certificates of deposit (CDs), passbooks, account ledgers, and computer records that relate to the bank's deposit-taking function. Also called Account Records and Deposit Account Records.

Bank Failure: When a bank is closed by its chartering authority and the FDIC is named as receiver.

Bank Find: A searchable database that allows a user to retrieve information either about a group of banks (such as all banks with a given name or in a given location) or for a single FDIC-insured institution by entering increasingly specific search criteria. In addition to confirming the insured status of a bank, the Bank Find system also provides a wide variety of information about each bank, including:

  • How long the bank has been insured
  • The name under which the bank is currently insured by the FDIC
  • The location(s) of the bank's main and branch office(s), by state, including street addresses
  • The bank's primary Internet website address (as provided by the bank to the FDIC)
  • A brief history of the bank, listing events such as mergers, branch acquisitions, etc., by date
  • The operating status of the bank—e.g. is it open and operating or was it closed by its chartering authority and the FDIC named as receiver.

Bank Merger: When two institutions merge together, or when one institution is assumed by another institution.

Bank Holding Company: A company that owns or controls one or more banks. A technical definition, which is beyond the scope of this glossary, can be found in the Bank Holding Company Act.

Basic Insurance Amount: The basic FDIC insurance amount is $250,000 per depositor, per bank, per ownership category. Deposits held in different ownership categories such as single, joint, trust, and retirement are separately insured, when the requirements for each ownership category are met, even if held at the same bank.

Beneficiary: A person or entity named or identified in either the bank account records or in a written trust that will have an interest in the trust upon the account owner's death. Irrevocable trust agreements often contain additional conditions which must be met before a beneficiary is entitled to receive funds.

Brokered CD: A Certificate of Deposit account established at an insured bank by an agent or broker that represents the deposits of one or multiple investors.

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C

Cashier's Check: A check drawn on a bank. It is considered a deposit and eligible for deposit insurance coverage. Also called Official Item.

Certain Retirement Accounts: Federal law specifies that only the following types of retirement plan deposits qualify for coverage as certain retirement accounts:

  • Traditional, Roth, Simplified Employee Pension (SEP) and Savings Incentive Match Plans for Employees (SIMPLE) Individual Retirement Accounts (IRAs)
  • Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE IRAs held in the form of 401(k) plans, self-directed defined contribution money purchase plans and self-directed defined contribution profit-sharing plans
  • Self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals.
  • Section 457 deferred compensation plan accounts, such as eligible deferred compensation plans provided by state and local governments

Certain retirement accounts are a separate account ownership category.

Certificate of Deposit (CD): A savings instrument that pays interest for specific period of time (term), at either a set or variable interest rate, and which is redeemable upon maturity. A CD is a deposit type, not an account ownership category. The amount of coverage available to the owner of a CD depends on the ownership category (single, joint, trust, IRA) in which the CD is held and what other deposit accounts the owner holds in that same category at the same bank. Also called Time Certificates and Investment Certificates.

Contingent Interest: A participant's share in a trust or employee benefit plan that is not determinable because of uncertain conditions.

Corporation: An incorporated business that includes both for-profit and not-for-profit entities. Corporation accounts, together with partnership and unincorporated association accounts, are a separate ownership category.

Corporation, Partnership, or Unincorporated Association Account: A deposit account held in the name of a corporation, partnership, or unincorporated association engaged in independent activity. Corporation, partnership and unincorporated association accounts are a separate account ownership category. This category does not, however, include accounts held in the name of a sole proprietorship. Deposits held in the name of a sole proprietorship are insured in the single account ownership category, as the personal deposits of the business owner.

Custodial Account: A fiduciary account where a custodian transacts business on the account on behalf of the actual owner of the funds, usually a minor. Also called Uniform Transfer to Minor Act (UTMA) accounts.

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D

Decedent Account: An account held in a deceased person's name or in the name of their estate. Decedent accounts, also called Estate accounts are insured in the single account category.

Defined Contribution Plan Account: A deposit account held in the name of an employee benefit plan as defined in section 3(34) of the Employee Retirement Income Security Act (ERISA). The most common fall under section 401(k) of the Act. Participants in such plans and/or their employers make regular contributions, usually on a pre-tax basis, as a way of saving for retirement. A defined contribution plan can be established by or for a single participant or for multiple participants.

  • When the plan participant(s) can direct where their assets are invested, including being deposited into a specific, FDIC-insured bank, the plan is considered ‘self-directed’. Self-directed defined contribution plan accounts are insured in the certain retirement account ownership category.
  • When a plan administrator (who may or may not also be a participant) directs the plan’s investments on behalf of all participants, the plan is NOT considered self-directed. Accounts held by these defined contribution plans are insured in the employee benefit plan ownership category.

Demand Deposit Account (DDA): A checking account. DDA is a deposit type, not an account ownership category. The amount of coverage available to the owner of a DDA would depend on the ownership category (single, joint, trust, IRA) in which the account is held and what other deposit accounts the owner holds in that same category at the same bank.

Deposit: Funds placed with an FDIC-insured bank and eligible for FDIC insurance coverage (see Deposit Type below).

Depositor: A person or entity (such as a corporation) who deposits funds at an FDIC-insured institution.

Deposit Account Records: Deposit account records include signature cards, certificates of deposit (CDs), passbooks, account ledgers, and computer records that relate to the bank's deposit-taking function. Also called Account Records and Bank Account Records.

Deposit Broker: A person or legal entity that acts as an intermediary in placing deposits with FDIC-insured banks.

Deposit Insurance Fund (DIF): The fund maintained by the FDIC to insure deposits at failed financial institutions.

Deposit Type: The type of transaction account or savings instrument into which funds are deposited. This includes checking accounts, negotiable order of withdrawal (NOW) accounts, savings accounts, CDs, and money market deposit accounts (MMDAs).

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E

EDIE The Estimator: The Electronic Deposit Insurance Estimator (EDIE) calculator allows users to enter information on their deposit accounts at an insured bank and generate a report showing what funds are insured and what funds (if any) are uninsured.

Eligible Beneficiary: To qualify as an eligible beneficiary, the beneficiary must be a living person, a charity or a non-profit organization. If a charity or non-profit organization is named as beneficiary, it must qualify as such under Internal Revenue Service (IRS) regulations.

Employee Benefit Plan Account: A deposit held under the terms of any plan that satisfies the definition of an employee benefit plan in section 3(3) of the Employee Retirement Income Security Act of 1974 (ERISA), including:

  • Defined contribution plans, such as a 401(k) plan, in which each participant has one or more accounts made up of contributions from the participant and/or the employer and investments are directed by a plan administrator and not each participant
  • Defined benefit plans in which the employer is obligated to pay an employee a certain benefit amount (for example, an amount based on the retired employee's years of service and salary at the time of retirement)
  • Employee welfare plans or welfare benefit plans, which are established by an employer or union to provide employees with medical, health, hospitalization benefits or income in the event of sickness, accident, or death. (Note: Welfare plans generally are funded through a trust)
  • Keogh plans, as defined in section 401(d) of the Internal Revenue Code of 1986 that are not self-directed.

Employee benefit plan accounts are a separate account ownership category.

Employer/Tax Identification Number (EIN/TIN): The IRS tax identification number used by entities to identify or to file tax returns or tax-exempt forms.

Escrow Account: A type of fiduciary account in which funds are held by an agent for a client who is the actual owner of the funds. See also Fiduciary Account and Power of Attorney.

Estate Account: An account held in the deceased person's name or in the name of their estate. Estate Accounts, also called Decedent Accounts, are insured in the single account category.

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F

Failed Bank: An FDIC-insured bank that has been closed by its chartering authority and the FDIC has been named as receiver. See Bank Failure.

Family Trust: A formal revocable trust created for estate planning purposes. A revocable family trust is one in which the owner (grantor) retains control over the funds during his or her lifetime, but also identifies beneficiaries who will receive trust assets upon the owner’s death. Revocable trust accounts, which include informal revocable trust accounts such as payable on death, in trust for, testamentary, or Totten trust accounts are a separate account ownership category. Also called Living Trusts and Formal Revocable Trusts.

Fiduciary Account: Accounts owned by one party but held in a fiduciary capacity by another party. Fiduciary relationships may include, but are not limited to, an agent, nominee, guardian, executor, or custodian. Common fiduciary accounts include Uniform Transfer to Minors Act (UTMA) accounts, escrow accounts, Interest on Lawyers Trust Accounts (IOLTAs), and deposit accounts obtained through a broker.

Formal Revocable Trust Account: A deposit held in the name of a written trust created for estate planning purposes in which the owner/grantor retains control over the funds during his or her lifetime, but also identifies beneficiaries who will receive trust assets upon the owner’s death. Formal revocable trust accounts, which include informal revocable trust accounts such as payable on death, in trust for, testamentary, or Totten trust accounts are a separate account ownership category. Also called Living Trusts and Family Trusts.

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G

Government Account: An account established by an official custodian containing funds of a public unit or political subdivision. Also known as Public Unit Accounts. Government accounts are a separate account ownership category.

Grantor: A person who establishes a revocable or irrevocable trust. This person is also referred to as the trust owner, settlor, or trustor.

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I

Independent Activity: A corporation, partnership, or unincorporated association shall be deemed to be engaged in an independent activity if the entity is operated primarily for some purpose other than to increase deposit insurance coverage.

Individual Account: An account held in the name of one person that does not name beneficiaries. Also called Single Accounts.

Individual Retirement Account (IRA): A deposit account that qualifies under Section 408(a) of the Internal Revenue Code of 1986. Retirement accounts that meet those requirements include:

  • Traditional IRAs
  • Roth IRAs
  • Simplified Employee Pension (SEP) IRAs, and
  • Simplified Incentive Match Plans for Employees (SIMPLE) IRAs.

All types of IRA deposit accounts are insured in the certain retirement account ownership category.

Informal Revocable Trust Account: An informal revocable trust account – also known as a payable on death, in trust for, testamentary, or Totten trust account -- is created when the account owner signs an agreement, usually part of the bank's signature card, stating that the funds are payable to one or more beneficiaries upon the owner's death. Informal revocable trust accounts and formal revocable trust accounts are insured in the same account ownership category.

Interest Check: A bank-issued check representing interest earned on an account. Also called Official Items.

Insurance Regulations: The regulations governing the amount of insurance coverage provided by the FDIC to the depositors of an insured depository institution. See 12 C.F.R. Part 330.

Insured Deposits: Deposits at an FDIC-insured bank with balances equal to or less than the applicable FDIC insurance limits.

IOLTA Account (Interest on Lawyers Trust Account): A fiduciary account established by an attorney, containing funds held by the attorney on behalf of one or more clients, where the accrued interest is paid to the State Bar Association or other organizations to fund legal assistance programs.

In Trust For (ITF): Term used for informal revocable trust accounts to evidence the owner’s intention that the deposit account is payable to the named beneficiaries upon the death of the owner. Terms and acronyms representing the same intention are payable on death (POD) and as trustee for (ATF). ITF/POD/ATF accounts are also known as testamentary or Totten trust accounts, and are insured in the revocable trust account ownership category, together with formal revocable trust accounts.

Irrevocable Trust Account: A deposit account held in the name of a written trust in which the owner (the person who created the trust) does not possess power to terminate or revoke the trust agreement although the owner may have a retained interest in the assets of the trust. An irrevocable trust may be created upon the death of the grantor of a revocable living trust, the actual execution or creation of an irrevocable trust agreement, or by statute, or a court order. Irrevocable trust accounts are a separate account ownership category. Because most irrevocable trusts may not qualify for per-beneficiary coverage, EDIE does not ask for beneficiary information. Due to the complexity of irrevocable trusts, you, your attorney, or your financial advisor should consult with the FDIC regarding deposit insurance coverage.

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J

Joint Account: A deposit account owned by two or more people, with equal withdrawal rights, that does not name beneficiaries. Joint accounts are a separate account ownership category. All co-owners of a joint account must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor, or conservator.

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K

Keogh Account: A deposit account held under a Keogh plan (also known as an H.R. 10 plan) which is a retirement plan for owners of businesses that are sole-proprietorships or partnerships. Self-directed Keogh plan deposit accounts are insured in the certain retirement account ownership category, along with any other accounts the owner may hold in that category. Keogh plan deposit accounts managed by a plan administrator for multiple participants are insured in the employee benefit plan account ownership category.

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L

Life Estate Beneficiary: An owner who identifies a beneficiary as having a life estate interest in a formal revocable trust is entitled to insurance coverage up to $250,000 for that beneficiary. A life estate beneficiary is a beneficiary who has the right to receive income from the trust or to use trust deposits during the beneficiary's lifetime, where other beneficiaries receive the remaining trust deposits after the life estate beneficiary dies.

Living Trust: A formal revocable trust created for estate planning purposes. A living trust is one in which the owner (grantor) retains control over the funds during his or her lifetime, but also identifies beneficiaries who will receive trust assets upon the owner’s death. Revocable trust accounts are a separate account ownership category, which also includes informal revocable trust accounts such as payable on death, in trust for, testamentary or Totten trust accounts, are a separate account ownership category. Also called Family Trusts and Formal Revocable Trusts.

LLC (Limited Liability Company or Limited Liability Corporation): A business entity with characteristics of both corporations and partnerships. If engaged in an independent activity, a limited liability company or limited liability corporation receives separate deposit insurance coverage in the Corporation, Partnership, and Unincorporated Association account ownership category.

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M

Money Market Deposit Account (MMDA): A savings account that allows the owner to make a limited number of transactions each month. Since it is a deposit account, an MMDA is subject to FDIC insurance coverage. An MMDA is a deposit type, not an ownership category. The amount of FDIC insurance coverage available to the owner of an MMDA account depends on the ownership category (single, joint, trust, etc.,) in which the MMDA account is held.

Mortgage Servicing Account: An account into which a mortgage servicer deposits payments from multiple borrowers. The payments from each borrower are usually composed of a Principal & Interest (P&I) portion, and a Taxes & Insurance (T&I) portion. The P&I portion of the account is insured up to $250,000 per borrower, separately from any deposits the borrower may also hold at the same bank. The T&I portion from each borrower, however, is added to any other single ownership accounts the borrower may hold at the bank and the combined total insured up to $250,000.

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N

Non-Citizen Coverage: Non-US citizens can have funds protected by FDIC insurance so long as the funds are deposited into an FDIC-insured institution and are within the insurance limits.

Non-Contingent Interest: A participant's share in a trust or employee benefit plan that is determinable without contingencies.

Non-Deposit Investment Products: Investment products that include stocks, bonds, mutual funds, annuities, and Treasury investments (bills, notes, and bonds). Because they are not deposits, the FDIC does not insure these investments, even if they were purchased through a bank.

Noninterest-Bearing Transaction Account: A deposit account where:

  • interest is neither accrued nor paid;
  • depositors are permitted to make an unlimited number of transfers and withdrawals; and
  • the bank does not reserve the right to require advance notice of an intended withdrawal.

NOW (Negotiable Order of Withdrawal) Account: A deposit account on which the depository institution has reserved the right to require at least 7 days written notice prior to withdrawal or transfer of any funds in the account.

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O

Official Custodian: An official custodian is an officer, employee, or agent of a public unit having official custody of public funds and lawfully depositing the funds in an insured institution. In order to qualify as an official custodian, a person must have plenary authority - including control - over the funds. Control of public funds includes possession as well as the authority to establish accounts in insured depository institutions and to make deposits, withdrawals, and disbursements.

For assistance in determining who the Official Custodian is for a given public unit, contact the legal counsel for the public unit.

Official Item: Is considered a deposit for the purposes of calculating insurance coverage, and includes official checks, cashier’s checks, and interest checks.

Ownership Category: A specific form of account ownership as set forth in the FDIC deposit insurance regulations. When the requirements for each ownership category are met, the deposits held in an ownership category receive separate FDIC insurance coverage. The most common ownership categories are: single; certain retirement; joint; revocable trust; irrevocable trust; employee benefit plan; corporation, partnership and unincorporated association; and public unit. Also called Account Category.

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P

Partnership: An association of two or more persons or entities formed to carry on as co-owners of an unincorporated business. Partnership accounts, together with corporation and unincorporated association accounts, are a separate account ownership category.

Pass-Through Coverage: Deposit insurance coverage that is provided for the interest of each participant in an employee benefit plan. Pass-through coverage also applies when a fiduciary deposits funds on behalf of a client provided certain requirements, such as record-keeping and titling, are met.

Payable on Death Account (POD): Term used for informal revocable trust accounts to evidence the owner’s intention that the deposit account is payable to the named beneficiaries upon the death of the owner. Terms and acronyms representing the same intention are in trust for (ITF) and as trustee for (ATF). POD/ITF/ATF accounts are also called testamentary or Totten trust accounts and are insured in the revocable trust account ownership category, along with formal revocable trust accounts.

Power of Attorney: A written statement identifying a person as the agent for another with powers stated in the document. Full power may be granted, or the authority may be limited to certain functions, such as making deposits and withdrawals from a checking account. The Power of Attorney must be drafted in conformance with state requirements.

Political Subdivision: See Public Unit Account.

Public Unit Account: An account established by an official custodian containing funds of a public unit or political subdivision. Public Unit Accounts are a separate account ownership category. Also called Government Accounts.

The terms "Public Unit" and "political subdivision" include drainage, irrigation, navigation, improvement, levee, sanitary, school or power districts, and bridge or port authorities, and other special districts created by state statute or compacts between the states. The term "political subdivision" also includes any subdivision or principal department of a public unit (state, county, or municipality) if the subdivision or department meets the following tests:

  • The creation of the subdivision or department has been expressly authorized by the law of such public unit;
  • Some functions of government have been delegated to the subdivision or department by such law; and
  • The subdivision or department is empowered to exercise exclusive control over funds for its exclusive use.

The term "political subdivision" does not include subordinated or non-autonomous divisions, agencies, or boards within subdivisions or principal departments.

For assistance in determining if a political subdivision meets the requirements above, contact the legal counsel for the public unit. Public Unit accounts are a separate ownership category.

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R

Retained Interest: A retained interest is ANY circumstance under which deposits held by the trust can be returned to or used by the Grantor, or used by a Trustee for the benefit of the Grantor. The Grantor must be living for this condition to exist. For the purposes of calculating insurance coverage, if the Grantor has retained an interest, EDIE assumes the retained interest is 100% of the deposit balance.

Revocable Trust Account: A deposit account held in the name of either an informal or formal trust created for estate planning purposes in which the owner (grantor) retains control over the funds during his or her lifetime but also identifies beneficiaries who will receive trust assets upon his or her death. Revocable trust accounts, both formal and informal, are a separate account ownership category. Also called POD accounts, ITF accounts, Living Trust Accounts, and Family Trust Accounts.

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S

Safe Deposit Box: Secure storage provided by some banks for customers. Since they are not deposits, the contents of a safe deposit box are not insured by the FDIC.

Section 457 Plan Account: A deposit held under a deferred compensation plan for state employees. Section 457 plan deposits for a particular individual/state employee are eligible for coverage up to $250,000 in the certain retirement account category, regardless of whether the specific plan is self-directed.

Self-directed Plan: This term means that the participants in the particular retirement plan have the right to direct the investment of assets maintained on their behalf by the plan. For deposit insurance purposes, the participant must be able to direct funds to a specific FDIC-insured institution. The definition of self-directed relates to the requirement for FDIC insurance coverage of certain retirement accounts.

Single Account: An account in the name of one individual with no named beneficiaries. Single accounts are a separate account ownership category. Also called Individual Accounts.

Sole Proprietorship: An unincorporated business in which all assets are owned by one person. Owners of sole proprietorships may use their own social security number or an employer identification number (EIN). It is important to determine if a business account is held by a sole proprietorship or an incorporated business because incorporated businesses are insured in a category separate from single accounts. Sole Proprietorship accounts are insured in the single account category as the personal deposits of the owner. The phrase Doing Business As (DBA) in the account title usually signifies that the account is held by a sole proprietorship.

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T

Testamentary Account: A revocable trust account in which the account title indicates that the deposits are payable to the named or identified beneficiaries upon the account owner’s (or owners’) death. See Formal Revocable Trust Account and Informal Revocable Trust Account.

Treasury Security: A type of non-deposit investment product.

Trustee: A person authorized to transact business on behalf of a trust. For irrevocable trusts this is usually someone other than the Grantor.

Trust Owner: A person who establishes a revocable or irrevocable trust. This person is also referred to as the grantor, settlor, or trustor.

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U

Unincorporated Association: An association of two or more persons formed for some religious, educational, charitable, social, or other non-commercial purpose. Unincorporated association accounts are a separate account ownership category which also includes corporations and partnerships.

Uninsured Deposit: The portion of an accountholder’s deposit account(s) that exceeds the applicable FDIC insurance limit. Depositors with uninsured funds may recover some portion of this amount upon the liquidation of the failed bank assets.

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