Your deposits at RCB Bank are insured by the Federal Deposit Insurance Corporation (FDIC).
Your deposits at RCB Bank, including checking, savings, money market accounts and CDs, are insured by the Federal Deposit Insurance Corporation (FDIC) up to the insurance limits. The basic insurance amount is $250,000 per depositor. Certain retirement accounts, such as Individual Retirement Accounts (IRAs), are insured up to $250,000 per depositor.
There is no need for depositors to apply for FDIC insurance or even to request it. Coverage is automatic at FDIC-insured financial institutions.
The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership.
Your accounts may qualify for more than $250,000 in coverage at RCB Bank if held in different ownership categories.
The most common ownership categories are:
Each of these ownership categories is described in more detail below.
Other Resources
These are deposit accounts owned by one person and titled in that person’s name only. 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: Retirement accounts and qualifying trust accounts are not included in this ownership category.
These are deposit accounts owned by one person and titled in the name of that person’s retirement plan. Only the following types of retirement plans are insured in this ownership category:
All deposits that an individual has in any of the types of retirement plans listed above at the same insured bank are added together and the total is insured up to $250,000. For example, if an individual has an IRA and a self-directed Keogh account at the same bank, the deposits in both accounts would be added together and insured up to $250,000.
Naming beneficiaries on a retirement account does not increase deposit insurance coverage.
Note: For information about FDIC insurance coverage for a type of retirement plan not listed above, use the Other Resources identified above.
These are deposit accounts owned by two or more people. If both owners have equal rights to withdraw money from a joint account, each person’s shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000.
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, providing up to $500,000 in coverage for the couple’s joint accounts.
Example: John and Mary have a $520,000 CD at an insured bank. Under FDIC rules, each person’s share of each joint account is considered equal unless otherwise stated in the bank’s records. John and Mary each own $260,000 in the joint account category, putting a total of $20,000 ($10,000 for each) over the insurance limit.
|
Account Holders |
Ownership Share |
Amount Insured |
Amount Uninsured |
| John |
$260,000 |
$250,000 |
$10,000 |
| Mary |
$260,000 |
$250,000 |
$10,000 |
| Total |
$520,000 |
$500,000 |
$20,000 |
Note: Jointly owned qualifying trust accounts are not included in this ownership category.
These are deposits held in either payable-on-death (POD) accounts or living trust accounts.
Payable-on-death (POD) accounts—also known as testamentary or Totten Trust accounts—are the most common form of revocable trust deposits. These informal revocable trusts are created when the account owner signs an agreement—usually part of the bank’s signature card—stating that the deposits will be payable to one or more named beneficiaries upon the owner’s death.
Living trusts—or family trusts—are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the deposits in the trust during his or her lifetime.
New Rules for Trust Account Owners Adopted September 26, 2008
The FDIC adopted an interim rule on September 26, 2008 to simplify its deposit insurance rules for revocable trust account owners. This interim rule eliminates the concept of qualifying beneficiaries. Coverage is now based on the number of beneficiaries specifically named in the documents used to establish the trust account(s). A “beneficiary” may be any natural person, as well as a charitable organization or other non-profit entity recognized as such under the Internal Revenue Code.
Trusts with up to Five Beneficiaries
Under the new rules, a trust account owner with no more than five different beneficiaries is separately insured up to $250,000 per beneficiary.
Example 1: Bill has a $1,000,000 trust account. His living trust names four beneficiaries, Susie, Johnny, Billy, and Jodie. Bill also has a $250,000 individual account styled in his name only, and a $250,000 POD account with his wife Sue as beneficiary. Sue has a $250,000 individual account styled in her name only, and a $250,000 POD account with Bill as beneficiary.
| Account Title | Account Balance | Amount Insured | Amount Uninsured |
| Bill – Individual Account | $250,000 | $250,000 | $0 |
| Bill – POD to Sue | $250,000 | $250,000 | $0 |
| Sue – Individual Account | $250,000 | $250,000 | $0 |
| Sue – POD to Bill | $250,000 | $250,000 | $0 |
| Bill’s Living Trust Account | $1,000,000 | $1,000,000 | $0 |
| Total | $2,000,000 | $2,000,000 | $0 |
Considering the ownership and beneficiaries, Bill and Sue’s accounts are fully insured. Bill has $1,500,000 of insurance coverage ($250,000 for his individual account, and $1,250,000 for his beneficiaries—his wife on the POD account and the four different beneficiaries named in his living trust). Sue has $500,000 of insurance coverage ($250,000 for her individual account, and $250,000 for her beneficiaries – her husband on the POD account).
When calculating coverage for revocable trust accounts, be careful to avoid these common mistakes:
Example 2: Jane has a $500,000 trust account. Her living trust names Bob (her nephew) and Sally (her friend) as beneficiaries. Jane also has a $500,000 POD account at the same bank that name the same individuals (i.e., Bob and Sally) as beneficiaries.
| Account Title | Account Balance | Amount Insured | Amount Uninsured |
|
Jane – POD Bob & Sally |
$500,000 | $500,000 | $0 |
|
Jane Living Trust |
$500,000 | $0 | $500,000 |
| Total | $1,000,000 | $500,000 | $500,000 |
Since Jane’s accounts name the same beneficiaries, her funds are not fully insured. The maximum coverage available to Jane given the ownership and beneficiaries of her accounts at the bank would be $500,000 ($250,000 for each different beneficiary). The naming of the same beneficiary in more than one revocable trust account, whether it be a payable-on-death (POD) or living trust, does not increase the total coverage amount.
A simple formula for determining coverage of your trust accounts with five or less beneficiaries at an FDIC-insured financial institution is:
Number of Grantor(s)/Owner(s) times $250,000 times Number of Beneficiaries
Trusts with More Than Five Beneficiaries
Under the new rules, trust accounts with more than five beneficiaries are insured up to the greater of:
Example: Fred has a living trust account with a balance of $1,100,000. Under the terms of the trust, Fred’s three children are each entitled to $50,000, his friend, John, is entitled to $5,000, and a designated charity is entitled to $70,000. The trust provides that the remainder of the trust assets belongs to Fred’s spouse.
| Beneficial Interest | Beneficiary Limits | Excess Beneficial Interest | |
| Living Trust Account | |||
| Three Children | $150,000 | $150,000 | $0 |
| Friend (John) | $5,000 | $5,000 | $0 |
| Charity | $70,000 | $70,000 | $0 |
| Spouse | $875,000 | $250,000 | $625,000 |
| Aggregate Beneficial Interest (subject to limits) | $475,000 | ||
| Account Balance | Amount Insured | Amount Uninsured | |
| Total | $1,100,000 | $1,100,000 | $0 |
Fred’s living trust account is fully insured. The maximum coverage afforded to him would be $1,250,000 (the greater of $1,250,000 or the aggregate beneficial interest of $475,000).
For help determining the insurance coverage for your living trust accounts, please visit your nearest RCB Bank office or contact the FDIC at 877.275.3342 for more information.
By federal law, as of 1/1/2013, funds in a noninterest-bearing transaction account (including an IOLTA/IOLA) will no longer receive unlimited deposit insurance coverage, but will be FDIC-insured to the legal maximum of $250,000 for each ownership category.
