FDIC Law, Regulations, Related Acts
4000 - Advisory Opinions
Insurance Coverage Afforded IRA and Keogh Accounts
August 25, 1989
Claude A. Rollin, Attorney
This is in response to your request for further clarification of the rules governing the deposit insurance afforded by the FDIC to IRA and Keogh accounts maintained at FDIC-insured banks.
All IRA and Keogh funds maintained in time and savings accounts by the same person (grantor) in the same insured bank are added together and insured on a combined basis up to $100,000. Non-IRA and non-Keogh deposits by that person in the same bank are separately insured up to an additional $100,000. The only situation where an individual's IRA account and his/her interest in a Keogh deposit in the same insured bank are not combined with each other is when the individual is an employee of a self-employed person (owner-employee) and covered under that person's Keogh plan.
In other words, the interest of an employee in a time or savings deposit made under an owner-employee's Keogh plan in an insured bank would be separately insured from the employee's IRA account in the same bank, but the owner-employee's interest in such Keogh deposit would be combined with the owner-employee's IRA account in that bank. The reason is that the FDIC's regulations require combining interests of the same beneficiary in deposits in the same insured bank pursuant to trusts set up by the same grantor (12 CFR § 330.10). In a Keogh plan, as you may know, the self-employed person is the grantor and a beneficiary of the plan, with the bank serving as trustee. In the case of an IRA deposit, the depositor is the grantor and beneficiary under a trust arrangement with the bank serving as trustee.