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Financial Institution Letter

Final Rulemaking on Simplification of Deposit Insurance Rules for Trust and Mortgage Servicing Accounts

January 21, 2022  |  FIL-07-2022


The Federal Deposit Insurance Corporation (FDIC) has published a final rule to amend the deposit insurance regulations for trust accounts and mortgage servicing accounts.  The changes are intended to make the deposit insurance rules easier to understand for depositors and bankers, facilitate more timely insurance determinations for trust accounts in the event of a bank failure, and enhance consistency of insurance coverage for mortgage servicing account deposits.  The final rule will take effect on April 1, 2024, providing depositors and insured depository institutions more than two years to prepare for the changes in coverage.

The final rule and a Fact Sheet can be found on the FDIC's website.

Statement of Applicability: The contents of, and material referenced in, this FIL apply to all FDIC-insured financial institutions.


  • The revocable and irrevocable trust deposit insurance categories will be merged into a new “trust accounts” category.
  • The final rule establishes a simple, consistent formula for calculating deposit insurance coverage for all revocable and irrevocable trust accounts.
  • Under the final rule, a deposit owner’s trust deposits will be insured in an amount up to $250,000 per beneficiary, not to exceed five beneficiaries, regardless of whether a trust is revocable or irrevocable, and regardless of contingencies or the allocation of funds among the beneficiaries. 
  • The final rule provides a maximum amount of deposit insurance coverage of $1,250,000 per owner, per insured depository institution for trust deposits.
  • The final rule is intended to facilitate more timely deposit insurance determinations for trust accounts in the event of a bank failure by streamlining the detailed, time-consuming review of trust agreements that is often required under the current, complicated trust rules.
  • Additionally, mortgage servicers’ advances of principal and interest funds on behalf of mortgagors in a mortgage servicing account would be insured up to $250,000 per mortgagor, consistent with the coverage for payments of principal and interest collected directly from mortgagors.

Related Topics:

Deposit Insurance