If you have more than $250,000 in your bank account, you could be at risk of exceeding the FDIC maximum insurance limits. That is unless your account is a Trust account.
If your bank account is titled in a trust, the $250,000 coverage extends to each of the beneficiaries of the trust. The number of beneficiaries is unlimited.
What is the FDIC?
The FDIC is an independent agency of the U.S. government created in 1933 to protect a customer’s deposits made into an insured bank in the event that said bank fails. FDIC insurance covers accounts at insured banks up to the insurance limit.
What’s New
On April 1, 2024, the Federal Deposit Insurance Corporation (FDIC) enacted a change related to insurance limits and trust beneficiaries and the change applies to new and existing deposit accounts. This also includes certificates of deposit (CDs), regardless of the purchase or maturity date.
The new limit for trust accounts is now: “ … maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts (including POD/ITF, revocable, and irrevocable trusts) held at the same bank.”
How is the FDIC funded?
The FDIC is funded by the institutions it insures and is backed by the U.S. government. Prior to 2008, the deposit insurance maximum was $100,000. It was temporarily raised to $250,000 in 2008 before being permanently raised in 2010.
What to do
If you have significant amounts in a bank account, you are encouraged to reach out to MeyerPink Law, LLP at [email protected] or (209) 694-3085 for more information and to discuss your options.
