Facts about FDIC Insurance & Coverage of your Deposits

Member FDIC. You've seen that phrase hundreds of times, but have you ever stopped and asked yourself what it really means?

The Federal Deposit Insurance Corporation (FDIC), an independent agency of the federal government, protects against the loss of insured deposits in the event an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States Government.

The FDIC was established in 1933 as a solution to the many bank failures in the Great Depression. It was created to give people peace-of-mind and gain back the public's confidence in banks.

How can I get FDIC insurance?

Depositors do not need to apply for FDIC insurance. Coverage is automatic whenever a deposit account is opened at an FDIC-insured bank. If you want your funds insured by the FDIC, make sure you are placing the funds in a deposit product at the bank and be aware of the FDIC deposit insurance limit for your particular ownership category.


What is the limit for FDIC insurance coverage?

The limit for FDIC insurance coverage depends on two things: (1) whether your chosen financial product is a deposit product; and (2) whether your bank is FDIC-insured. Deposits at FDIC-insured institutions are insured to at least $250,000 per depositor for each account ownership category. Learn more at: http://www.fdic.gov/deposit


How do you maximize FDIC Insurance Coverage?

The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled. In addition to single and joint ownership categories,other account types opened at the same or different bank will allow you to raise your FDIC insurance limit by $250,000 per ownership category. Some additional ownership categories include:


•   Certain retirement accounts
•   Revocable trusts
•   Irrevocable trusts
•   Employee benefit plan accounts
•   Corporation
•   Partnership
•   Unincorporated association accounts
•   Government accounts.

For example, if you are married and have a joint account, you will be insured for $250,000 per person in the joint ownership category, with a total of $500,000 total.


What does the FDIC do when a bank fails?

If your insured bank fails, FDIC insurance will cover your deposit accounts, dollar for dollar up to at least $250,000, which includes principal plus any interest accrued or due to the depositor through the date of the insured bank’s closing.


Are CD’s FDIC insured?
Yes, certificate of deposits (CDs) are insured up to the FDIC limit of $250,000 per depositor, per FDIC-insured bank, per ownership category.

What does FDIC insurance cover?

The FDIC insurance covers all types of deposits received at an insured bank. Some FDIC insured accounts include:
•   Checking accounts
•   Negotiable Order of Withdrawal (NOW) accounts
•   Savings accounts
•   Money market deposit accounts (MMDAs)
•   Time deposits such as certificates of deposit (CDs)
•   Cashier's checks, money orders, and other official items issued by a bank
 
What does FDIC Insurance not cover?
FDIC insurance doesn’t cover other financial products and services banks may offer. These services include:

•   Stock investments
•   Bond investments
•   Mutual funds
•   Life insurance policies
•   Annuities
•   Municipal securities
•   Safe deposit boxes or their contents
•   U.S. Treasury bills, bonds or notes
 
Questions About How Much FDIC Insurance Coverage You Have?
Take advantage of the FDIC's Electronic Deposit Insurance Estimator (EDIE) to calculate the FDIC insurance available for your personal and/or business deposits at: https://www.fdic.gov/edie/.
 
For additional information relating to FDIC insurance coverage, call the FDIC at 1-877-275-3342, or visit its website at http://www.fdic.gov/.
 
Deposits maintained at other insured depository institutions
PurePoint® Financial is division of MUFG Union Bank, N.A. The deposit accounts you may maintain at PurePoint Financial and MUFG Union Bank, N.A., are not separately insured; rather, they are added together and insured up to the FDIC insurance limit of $250,000.
 
However, any deposits you maintain at another separately chartered and insured bank are insured separately from your deposits at PurePoint Financial and MUFG Union Bank, N.A.


Conclusion

Information in this article was based on information provided on FDIC website. Information is not intended to provide estate planning advice. Depositors seeking such assistance should contact a financial or legal advisor.

 
We hope this article answered most of your questions about FDIC Insured accounts and deposit coverage. If you have anymore questions relating to FDIC insurance coverage, call the FDIC at 1-877-275-3342, or visit its website at http://www.fdic.gov/.