Your Insured Deposits

- Please see the banking FDIC page Your Insured Deposits for full details...

- For Brokerage insurance see What SIPC Protects

- Credit Unions have their own federal insurance.  See the NCUA brochure.  It reads a lot like the FDIC insurance below for single, joint, retirement accounts, etc.

SIPC protects against the loss of cash and securities – such as stocks and bonds – held by a customer at a financially-troubled SIPC-member brokerage firm. The limit of SIPC protection is $500,000, which includes a $250,000 limit for cash.

Note: Money Market Mutual Funds are insured as securities, not cash by SIPC

FDIC Overview

If you bank at one bank with your spouse, you can increase your FDIC coverage by having two single ownership accounts and joint accounts.  2 individual accounts + 1 joint account = $750K total.

If you are single with kids, you can add your kids as POD (pass on death) to get 250K coverage for each beneficiary.  1 child = same 250K, 2 children = 500K, 3 children or beneficiaries = 750K on your single bank account.

If you have a brokerage account that allows brokeraged CDs at various banks, those CDs would each be insured for 250K as long at they are the only funds at those banks in your name.

TSP G fund and Treasury Direct I Series Bonds (and others) are backed by the US Govt.

TBD: Other TSP funds but assume it is the same as other brokerages and 250K is covered. The mutual fund window raises an interesting question.

FDIC:

Deposits are insured up to at least $250,000

per depositor,

per FDIC-insured bank,

per ownership category.

  Individual            Joint

FDIC Bank Account                          250K                     500K          per bank

Revocable Trust Acct                       250K   per beneficiary (in some instances)

add POD (pass on death)               250K    per POD beneficiary (so 3 x 250K = 750K)

CDs (certificates of deposit)            250K

MMDAs (money market deposit accounts are "accounts" at banks)

Cashier's checks, money orders, and other official items issued by a bank

Q: What is the difference between “deposit products and “ownership categories”?

A: Deposit products include checking accounts, savings accounts, CDs and MMDAs and are insured by the FDIC. The amount of FDIC insurance coverage you may be entitled to, depends on the ownership category. This generally means the manner in which you hold your funds. Some examples of FDIC ownership categories, include single accounts, certain retirement accounts, employee benefit plan accounts, joint accounts, trust accounts, business accounts as well as government accounts.

Deposits held in different ownership categories are separately insured, up to at least $250,000, even if held at the same bank. 

Ownership Categories

This section describes the following FDIC ownership categories and the requirements a depositor must meet to qualify for insurance coverage above $250,000 at one insured bank.

• Single Accounts
• Certain Retirement Accounts
• Joint Accounts
• Revocable Trust Accounts
• Irrevocable Trust Accounts
• Employee Benefit Plan Accounts
• Corporation/Partnership/Unincorporated Association Accounts
• Government Accounts

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Example 1: Single Account

Account Title                Deposit Type                      Account Balance

Marci Jones                     MMDA                               $15,000

Marci Jones                     Savings                             $20,000

Marci Jones                     CD                                     $200,000

Marci's Memories (A Sole Proprietorship) Checking     $25,000

Total      $260,000

Amount Insured               $250,000

Amount Uninsured          $10,000

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Certain Retirement Accounts

A retirement account is insured under the Certain Retirement Accounts ownership category only if the account qualifies as one of the following:

Note: Adding beneficiaries on self-directed IRA does not increase FDIC insurance.

The FDIC adds together all retirement accounts listed below owned by the same person at the same insured bank and insures the total amount up to $250,000.

Traditional IRA

Roth IRA

Simplified Employee Pension (SEP) IRA

Savings Incentive Match Plans for Employees (SIMPLE) IRA

Self-directed defined contribution plan account includes

Self-directed 401(k) plan

Self-directed SIMPLE IRA held in the form of a 401(k) plan

Self-directed defined contribution profit-sharing plan

Self-directed Keogh plan account (or H.R.10 plan account) designed for self-employed individuals

Section 457 deferred compensation plan account, such as an eligible deferred compensation plan provided by state and local governments regardless of whether the plan is self-directed

The FDIC defines the term "self-directed" to mean that plan participants have the right to direct how the money is invested, including the ability to direct that deposits be placed at an FDIC-insured bank.

Joint Accounts

250K + 250K = 500K insured if both living, plus 250K for single accounts

Michael: If someone passes, then the living spouse could add two or more PODs to get more insurance

All your joint accounts at one bank are added together for your joint account insurance total of 250K

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Insurance Coverage for Each Owner is Calculated as Follows:

Owners             Total           Insured                 Uninsured

Mary              $330,000        $250,000            $80,000

John              $330,000        $250,000            $80,000

Robert            $90,000         $90,000               0

Total              $750,000        $590,000            $160,000

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Brokered CDs at other banks:  250K per bank

For example, while Charles Schwab has SIPC insurance on your brokerage balances, if you buy brokered (with banks) CDs, each CD will have 250K FDIC insurance.