Your FDIC Questions Answered
What Is the FDIC?
The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC’s creation in 1933, no depositor has ever lost even one penny of FDIC-insured funds.
What is covered by the FDIC?
Savings, checking, and other deposit accounts, when combined, are now insured to $250,000 per depositor in each FDIC-insured bank or thrift. In addition, individual depositors may qualify for more than $250,000 of coverage at one bank if they hold deposits in different categories of ownership, such as single, joint accounts, or revocable trust accounts. Also, the FDIC generally provides separate coverage for retirement accounts, such as individual retirement accounts (IRAs) and Keoghs, insured up to $250,000.
Are deposits at 1st Security Bank covered by the FDIC?
Yes. 1st Security Bank is a member of the FDIC, and we display our membership at each of our branch locations.
What types of accounts are eligible for FDIC insurance?
FDIC insurance covers all deposit accounts at insured banks and savings associations, including checking, NOW, and savings accounts, money market deposit accounts and certificates of deposit (CDs) up to the insurance limit.
The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if you purchased these products from an insured bank or savings association.
Are Money Market accounts covered?
Absolutely, Money Market deposit accounts issued by a bank are fully covered by the FDIC up to $250,000 of total deposits by an individual depositor.
How can I keep my deposits within FDIC insurance limits?
If you and your family have $250,000 or less in all of your deposit accounts at the same insured bank or savings association, you do not need to worry about your insurance coverage — your deposits are fully insured. A depositor can have more than $250,000 at one insured bank or savings association and still be fully insured provided the accounts meet certain requirements. In addition, federal law provides for insurance coverage of up to $250,000 for certain retirement accounts.
What are the basic FDIC coverage limits?*
| Single Accounts (owned by one person): | $250,000 per owner |
|---|---|
| Joint Accounts (two or more persons): | $250,000 per co-owner |
| IRAs and certain other retirement accounts: | $250,000 per owner |
| Revocable trust accounts: | Each owner is insured up to $250,000 for the interests of each beneficiary, subject to specific limitations and requirements |
* These deposit insurance coverage limits refer to the total of all deposits that account holders have at each FDIC-insured bank. The listing above shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met.
Is it possible to have more than $250,000 at one insured bank and still be fully covered?
You may qualify for more than $250,000 in coverage at one insured bank or savings association if you own deposit accounts in different ownership categories. The most common account ownership categories for individual and family deposits are single accounts, joint accounts, revocable trusts accounts and certain retirement accounts.
What is a single account?
This is a deposit account owned by one person and titled in that person’s name only, with no beneficiaries. All of your single accounts at the same insured bank are added together and the total is insured up to $250,000. For example, if you have a checking account and a CD at the same insured bank, and both accounts are in your name only, the two accounts are added together and the total is insured up to $250,000. Note that retirement accounts and eligible trust accounts are not included in this ownership category.
What is a joint account?
This is a deposit account owned by two or more people and titled jointly in the co-owners’ names only, with no beneficiaries. If all co-owners have equal rights to withdraw money from a joint account, a co-owner’s shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000. Note that jointly owned revocable trust accounts are not included in this ownership category.
If a couple has a joint checking account and a joint savings account at the same insured bank, each co-owner’s shares of the two accounts are added together and insured up to $250,000 per owner, providing up to $500,000 in coverage for the couple’s joint accounts.
Example: John and Mary have three joint accounts totaling $600,000 at an insured bank. Under FDIC rules, each co-owner’s share of each joint account is considered equal unless otherwise stated in the bank’s records. John and Mary each own $300,000 in the joint account category, putting a total of $100,000 ($50,000 for each) over the insurance limit.
| Joint Account Example | ||
|---|---|---|
| Account Title | Type of Deposit | Account Balance |
| Mary and John Smith | Checking | $50,000 |
| John or Mary Smith | Savings | $150,000 |
| Mary Smith or John Smith | CD | $400,000 |
| Total Deposits | $600,000 | |
| Insurance coverage for each owner is calculated as follows: | |||
|---|---|---|---|
| Account Holders | Ownership Share | Amount Insured | Amount Uninsured |
| John | $300,000 | $250,000 | $50,000 |
| Mary | $300,000 | $250,000 | $50,000 |
| Total | $600,000 | $500,000 | $100,000 |
- Mary’s ownership share in all joint accounts equals $300,000 [1/2 of the checking account ($25,000), 1/2 of the savings account ($75,000), and 1/2 of the CD ($200,000), for a total of $300,000]. Since her coverage in the joint ownership category is limited to $250,000, $50,000 is uninsured.
- John’s ownership share in all joint accounts is the same as Mary’s, so $50,000 is uninsured.
How can I be sure my accounts are adequately covered by the FDIC?
The best way is to stop by a 1st Security Bank branch and sit down with one of our branch staff and review your accounts to ensure you are maximizing your coverage. Also, the FDIC Web site features an Electronic Deposit Insurance Estimator that can help you determine if you have adequate deposit insurance for your accounts.