FDIC Law, Regulations, Related Acts
4000 - Advisory Opinions
Insurance Coverage Afforded IRAs Where Decedent Names a Beneficiary Who Maintains His or Her Own IRA in the Same Insured Depository Institution and Effect of Naming Different Beneficiaries on Separate IRAs of Same Owner
FDIC 91-40 May 2, 1991 Roger A. Hood, Assistant General Counsel
This is in response to your letter pertaining to deposit insurance coverage of IRA accounts. I very much regret that we have taken so long to respond to your inquiry, but we have recently received so many letters from the public that we are sometimes not able to reply as quickly as we would like.
IRA accounts are insured, up to $100,000, separately from all other types of accounts maintained by the settlors, trustees, and beneficiaries of such accounts at the same insured depository institution. To the extent that an individual has more than one IRA account in his or her name at the same insured institution, the accounts are added together and insured up to $100,000 in the aggregate.
In your letter, you pose the following specific questions:
(1) A husband and wife each have an IRA at the same bank. The husband dies, naming the wife as beneficiary and the widow rolls his IRA funds into her IRA account. How are the funds insured?
All IRA funds owned by the widow (including the funds she received as beneficiary and rolled into her own IRA account) are added together and insured up to $100,000 in the aggregate.
(2) Same situation as above, except the widow does not roll the deceased spouse's IRA into her own IRA, but maintains two separate IRAs. Does it make any difference if she continues to make contributions into the IRA that she originally established? How are the two IRA accounts insured?
So long as the two accounts remain separate, one in the name of the surviving spouse and one in the name of the deceased spouse, each account would be separately insured up to $100,000. It does not make any difference whether or not the surviving spouse continues to make contributions to his/her own IRA account.
(3) Two friends maintain IRAs at the same bank. One friend dies and names the other friend as beneficiary. Because there is no spousal relationship, the surviving friend cannot roll the acquired IRA into his original IRA. How are the two IRA accounts insured?
The same rule applied in question two--so long as the two IRA accounts remain separate, they would be separately insured up to $100,000--would apply here as well.
(4) A customer has two separate IRAs at a bank. Is there any difference in FDIC coverage if different beneficiaries are named in each IRA or is the coverage on IRAs at one institution for an individual limited to $100,000?
Deposit insurance coverage for IRA accounts established by one individual is limited to $100,000 per insured depository institution. Thus, two IRA accounts established by the same person at the same FDIC-insured bank would be aggregated and insured up to $100,000, despite the fact that each account names different beneficiaries.
I hope this information is helpful to you. Should you have any additional questions, I can be reached at (202) 898-3681.