FDIC- personal accounts

 By Jeff Roth

With all of the national concerns, even protection of our funds in a nationally insured banking institution can be at issue. Several years ago the government increased the amount of coverage from $100,000.00 to $250,000.00 per depositor, per insured bank, for each account ownership category. The government devised a very complicated formula to determine exactly how much would be protected. It combines the entire depositor’s like accounts in the calculation. Protection is granted based on ownership and stated beneficiaries.


Single accounts

Single accounts are accounts that are held by one person in their individual name. The total of account protection for each banking institution is $250,000.00. This would include checking, savings, money markets or certificates of deposit or any form of those listed. All of these accounts are added together and considered one for insurance purposes. It has nothing to do with the number of accounts but rather the ownership of the accounts. Included in this category are any business accounts that are held in a “doing business as” nature. The account is separate only if it is a corporation or totally separate entity and has its own identification number, otherwise it is included in the above account totals. 

Joint accounts

This is an account owned by two or more individuals. This would include joint with rights of survivor or tenants in common. Each person may have a total of $250,000.00 in any one banking institution. Each owner is considered to have an equal ownership interest unless clearly stated otherwise. If there are three owners then each has a one-third ownership. Each co-owner must have signed the signature card and have an equal right of withdrawal. If a person has $200,000.00 in various individual accounts and is a 1/2 owner of an account that has $160,000.00 then he or she will have coverage of a total of $250,000.00 and $30,000.00 will not be covered. All accounts are considered taken together and the use of the social security number is not relevant for insurance protection qualification. 

Payable on death accounts

This is an account with a stated beneficiary. One must know the correct rules to guarantee protection. These accounts protect the beneficiary. If there are two beneficiaries and one dies, coverage terminates as to that beneficiary and only half of the account would be covered. Bank input is important to insure proper protection on this type of account.  

Individual retirement accounts

This is an account that is owned and directed by you and not the plan administrator. This includes, IRAs, Roth IRAs, 401(k), Keogh plans, simplified Employed Pension Accounts and all 457 accounts. All self-directed funds owned by the same person are added together and protected up to $250,000.00 in each banking institution. It is irrelevant how many beneficiaries are listed. The only determination is $250,000.00 for each owner in each banking institution. Remember, this relates only to money accounts in an insured bank. This has nothing to do with stock. If an individual has seven different accounts ranging from $20,000.00 to $100,000.00 and many beneficiaries listed such as children and grandchildren only a total of $250,000.00 is covered and the balance is uninsured. 

My recommendation if you have considerable funds in several accounts at one banking institution is to have the accounts reviewed with a qualified bank employee. This will give you the comfort of knowing that the funds are totally protected with the full faith and credit of the United States.

Jeff Roth is a partner with David Bacon and associate Jessica Moon of the firm ROTH and BACON with offices in Port Clinton, Upper Sandusky, Marion, Ohio and Fort Myers, Florida. All members of the firm are licensed in Ohio and Florida. Mr. Roth’s practice is limited to wealth strategy planning and elder law in both states. Nothing in this article is intended for, nor should be relied upon as individual legal advice. The purpose of this article is to provide information to the public on concepts of law as they pertain to estate and business planning. Jeff Roth can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. (telephone: 419-732-9994) copyright Jeffrey P. Roth 2012.


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