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Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

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Inactive Financial Institution Letters 

Joint Accounts and "Payable-on-Death" Accounts

August 21, 1998


SUBJECT: Proposed Amendments to Deposit Insurance Regulations

The FDIC Board of Directors is requesting comments on the attached proposal to amend the regulations governing the insurance coverage of joint accounts and "payable-on-death" ("POD" or revocable trust) accounts. Comments are due by October 15, 1998. Summaries of the two proposed amendments follow.

Joint Accounts

Under the current regulations, the coverage of qualifying joint accounts is governed by a two-step process. First, all joint accounts owned by the same combination of individuals at the same insured depository institution are added together and the amount in excess of $100,000 is uninsured. Second, the interests of each individual in all joint accounts, whether owned by the same or some other combination of individuals, are added together and insured up to a limit of $100,000. Under the proposed amendment, the first step in this two-step process would be eliminated. As a result, a joint account could be insured for more than $100,000 (not possible under step one of the current regulations), but no individual could obtain coverage in excess of $100,000 for his or her combined interests in all joint accounts (the same result mandated by step two of the current regulations).

"Payable-on-Death" Accounts

All qualifying "POD" accounts owned by an individual at the same insured depository institution are added together and insured up to $100,000 for each "qualifying beneficiary." Under the current regulations, the list of "qualifying beneficiaries" consists of the owner's spouse, children and grandchildren. Under the proposed amendment, this list would be expanded to include the owner's parents and siblings.

For further information, please contact Christopher Hencke in the FDIC's Legal Division at (202) 898-8839.

William F. Kroener, III
General Counsel
Attachment: Federal Register, Vol. 63, No. 137 (12 CFR Part 303)

Distribution: All Insured Banks and Savings Associations

NOTE: Paper copies of FDIC financial institution letters may be obtained through the FDIC's Public Information Center, 801 17th Street, NW, Room 100, Washington, DC 20434 (800-276-6003 or (703) 562-2200).

Last Updated 07/17/1999

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