From the Virginia Society of Certified Public Accountants - Presented by Dean Knepper, CPA, CFP®


(October 25, 2004) — The FDIC (Federal Deposit Insurance Corporation) was established by U.S. Congress in 1933 to protect depositors against loss in the event an FDIC-insured bank fails. If that happens, FDIC insurance covers deposit accounts up to the insurance limit. Here, the Virginia Society of CPAs answers some frequently asked questions about FDIC insurance.

- What types of accounts are covered by FDIC insurance? -

FDIC insurance applies to all types of deposits payable in the United States at an insured bank, including deposits in checking and savings accounts, money markets and certificates of deposit (CDs).

- Does the FDIC insure all investments sold by an insured bank? -

No. The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance or annuities, even if you buy these products from an insured bank.

- What is the FDIC insurance limit? -

FDIC insurance covers the balance in each depositor’s account up to the insurance limit of $100,000 per depositor. That limit applies to the total of a person’s funds in checking, savings, money market and CD accounts at one bank.

- Can I increase my insurance coverage by opening accounts at different FDIC-insured banks? -

Yes. Your deposits with each FDIC-insured bank are insured separately from any deposits you have at another bank. Deposits in different branches of the same bank are not separately insured.

- Can I increase my insurance coverage by opening several different accounts at the same FDIC-insured bank? -

Yes. Deposit insurance coverage can be increased when accounts at the same bank are held in different categories of ownership. The most common ownership categories are single accounts, joint accounts, revocable trust accounts and self-directed retirement accounts.

Single accounts are owned by one person and titled in that person’s name only. All of a person’s single titled accounts at the same bank are added together and insured for up to $100,000. For example, if you have a checking and a savings account at the same bank, both in your name alone, the balances in both accounts are added together and insured for up to $100,000.

- What if I also have money in a joint account? -

Joint accounts are owned by two or more people who have equal rights to deposit and withdraw money from the account. Each person’s share of all accounts that are jointly held at the same insured bank are added together and the total is insured for up to $100,000. For example, a husband and wife can have up to $200,000 in one or more joint accounts at the same insured bank and the deposits would be fully insured. Similarly, one spouse could have $100,000 in a joint account and $100,000 in a single account and have deposits fully insured.

- Are my retirement account funds separately insured? -

All of your self-directed retirement accounts at the same insured bank are added together and the total is insured for up to $100,000. This is separate from your non-retirement accounts. Self-directed retirement accounts include traditional and Roth IRAs and Simplified Employee Pension Plans. Naming different beneficiaries on a self-directed retirement account does not increase the amount of insurance coverage.

- What are revocable trust accounts and how are they insured? -

Revocable trust accounts are deposits held in either a payable-on-death (POD) account or a living trust account. These accounts require that, upon the death of the owner, funds pass to the named beneficiary. Revocable trust accounts are insured for up to $100,000 per owner for each qualifying beneficiary. Qualifying beneficiaries are the owner’s child, grandchild, spouse, parent or sibling. A parent who has three children and opens a living trust and lists the three children as beneficiaries can have $300,000 in insured deposits.

- What if I have additional questions regarding FDIC coverage? -

A CPA can review your financial plan and help you make the most of FDIC insurance coverage. You can also visit the FDIC Web site at

The Virginia Society of CPAs is the leading professional association dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. Founded in 1909, the Society has nearly 8,000 members who work in public accounting, industry, government and education. This Money Management column and other financial news articles can be found in the Press Room on the VSCPA Web site at

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