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Your Insured Deposit |
This
booklet describes the deposit insurance coverage provided by the Federal
Deposit Insurance Corporation (FDIC) to depositors of insured banks and
insured savings associations. The FDIC is an independent agency of the
U.S. Government. It was established by Congress in 1933 to insure bank
deposits, help maintain sound conditions in our banking system, and
protect the nation's money supply in case of financial institution
failure. FDIC-insured deposits are backed by the full faith and credit
of the United States. |
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Your Insured Deposit - General Insurance Page |
General Insurance Questions |
1.
Whose deposits does the FDIC insure?
Any person or entity can have FDIC insurance on a deposit. A depositor does not have to be a United States citizen, or even a resident of the United States. 2. What types of financial institutions are insured by the FDIC? The FDIC insures deposits in some, but not all, banks and savings associations. FDIC-insured institutions must display an official sign at each teller window or teller station. Insured savings associations display the official savings association (eagle) sign. Insured banks display either the official bank (FDIC) sign or the official savings association (eagle) sign. Both signs are shown at the end of this booklet. 3. What does federal deposit insurance cover? In the event of a bank failure, federal deposit insurance protects deposits that are payable in the United States. Deposits that are only payable overseas, and not in the United States, are not insured. Securities, mutual funds, and similar types of investments are not covered by deposit insurance. Creditors (other than depositors) and shareholders of a failed bank or savings association are not protected by federal deposit insurance. 4. What types of deposits are insured? All types of deposits received by a financial institution in its usual course of business are insured. For example, savings deposits, checking deposits, deposits in NOW accounts, Christmas Club accounts, and time deposits (including certificates of deposit, which are sometimes called "CDs") are all insured deposits. Cashiers' checks, officers' checks, expense checks, loan disbursement checks, interest checks, outstanding drafts, negotiable instruments and money orders drawn on the institution also are insured. Collectively, these types of instruments are referred to as "official checks." Certified checks, letters of credit, and travelers' checks, for which an insured depository institution is primarily liable, also are insured when issued in exchange for money or its equivalent, or for a charge against a deposit account. 5. Does federal deposit insurance cover Treasury securities? Treasury securities (bills, notes, and bonds) purchased by an insured depository institution on a customer's behalf are not insured by the FDIC. However, they remain the property of the customer. When an insured financial institution is closed and the FDIC is named its receiver, the customer has two options. First, the customer can present a receipt documenting to the FDIC's satisfaction his or her ownership rights. The FDIC as receiver will give the customer a release that the customer can present to a Federal Reserve Bank or the Department of the Treasury to prove ownership. Alternatively, the FDIC as receiver can hold all Treasury securities and make a distribution upon maturity in the same manner and extent as the closed institution would have done. 6. If I have deposits in several different FDIC-insured institutions, will my deposits be added together for insurance purposes? No. Deposits in different institutions are insured separately. But, if an institution has one or more branches, the main office and all branch offices are considered to be one institution. So, if you have deposits at the main office and at one or more branch offices of the same institution, the deposits are added together when calculating deposit insurance coverage. Financial institutions owned by the same holding company, but separately chartered, are separately insured. 7. How does the FDIC determine ownership of funds? The FDIC presumes that funds are owned as shown on the "deposit account records" of the insured depository institution. If the FDIC determines that the deposit account records of the institution are unambiguous, those records are binding on the depositor. No other records are considered in determining legal ownership. Generally, the FDIC will not recognize a fiduciary relationship (e.g., trustee, agent, nominee, guardian, executor, custodian, or conservator) unless the relationship is specifically disclosed in the deposit account records. Also, the details of the fiduciary relationship and the interests of the parties in the account must be ascertainable one of two ways: either from the deposit account records of the depository institution or from records maintained in good faith and in the regular course of business by the depositor, or by some person or entity that has agreed to maintain records for the depositor. 8. What are "deposit account records"? The "deposit account records" of an insured depository institution are account ledgers, signature cards, certificates of deposit, passbooks, and certain computer records. However, account statements, deposit slips, items deposited, and cancelled checks are not considered deposit account records for purposes of calculating deposit insurance. 9. Is there continuation of deposit insurance coverage after a depositor dies? Yes. Starting July 1, 1998, for six months after the death of a deposit owner, the FDIC will insure that person's accounts as if he or she were still alive. During this "grace period," the insurance coverage of the deposit owner's accounts will not change unless the accounts are restructured by those authorized to do so. The FDIC applies the grace period only if its application would increase, rather than decrease, deposit insurance coverage. Example: A and B own a qualifying joint account of $100,000 for which they each have a right of survivorship. B also has a single ownership (or individual) account of $100,000 at the same FDIC-insured institution. If A dies, for six months after A's death the FDIC will still insure the A and B account as a joint account, even though B, as A's survivor, has inherited A's ownership interest in the account. Without the grace period, B's increased ownership interest in the joint account would be added to his or her single ownership account and insured to a limit of $100,000. |
Your Insured Deposit - Basic Insurance Limit |
Basic Insurance Limit | ||
10.
What is the amount of FDIC insurance coverage?
The basic insured amount of a depositor is $100,000. Accrued interest through the date of the financial institution's closing (failure) is included when calculating insurance coverage. Deposits maintained in different categories of legal ownership are separately insured. So, you can have more than $100,000 insurance coverage in a single institution. The most common categories of ownership are single (or individual) ownership, joint ownership, and testamentary accounts. Separate insurance is also available for funds held for retirement purposes, e.g., Individual Retirement Accounts, Keoghs, and pension or profit-sharing plans (see Questions 35, 36 and 37). 11. Can I increase FDIC insurance coverage by dividing my funds and depositing them into several different accounts? No. Federal deposit insurance is not determined on a per-account basis. You cannot increase FDIC insurance by dividing funds owned in the same ownership category among different accounts. The type of account - whether checking, savings, certificate of deposit, or outstanding official check such as a cashier's check (see Question 4), or other form of deposit - has no bearing on the amount of insurance coverage. Furthermore, the use of Social Security numbers or tax identification numbers does not determine insurance coverage. |
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