FDIC Your Insured Deposit Joint Accounts

A joint account is an account owned by two or more individuals.

17. How are joint accounts insured?

Joint accounts are insured separately from single ownership accounts if all of the following conditions are met:

• All co-owners must be natural persons. This means that legal entities such as corporations or partnerships are not eligible for joint account deposit insurance coverage.
• Each of the co-owners must have a right of withdrawal on the same basis as the other co-owners. For example, if one co-owner can withdraw funds on his or her signature alone, but the other co-owner can withdraw funds only on the signature of both co-owners, then this requirement has not been satisfied; the co-owners do not have equal withdrawal rights. Likewise, if a co-owner's right to withdraw funds is limited to a specified dollar amount, the funds in the account will be allocated between the co-owners according to their withdrawal rights and insured as single ownership funds. So, for example, if $100,000 is deposited in the names of A and B, but A has the right to withdraw only up to $5,000 from the account, $5,000 is allocated to A and the remainder is allocated to B. The funds, as allocated, are then added to any other single ownership funds of A or B, respectively.
• Each of the co-owners must have personally signed a deposit account signature card. The execution of an account signature card is not required for certificates of deposit, deposit obligations evidenced by a negotiable instrument, or accounts maintained by an agent, nominee, guardian, custodian, or conservator, but the deposit must in fact be jointly owned.

18. What is the rule for determining joint account coverage?

The interests of each individual in all joint accounts he or she owns at the same FDIC-insured depository institution are added together and insured up to $100,000 maximum. Each person's interest (or share) in a joint account is deemed equal unless otherwise stated on the deposit account records.

Example of Insurance for Joint Ownership Accounts

Four qualifying joint accounts are owned by A, B, C and D, as follows:

Each owner's ownership interests in these four joint accounts follow:

A's ownership interest in the joint account category is limited to $100,000, so $27,500 is uninsured.

B's ownership interest in the joint account category is $87,500. That amount is less than the $100,000 maximum, so it is fully insured.

C's ownership interest in the joint account category is $25,000. That amount is less than the $100,000 maximum, so it is fully insured.

D's ownership interest in the joint account category is $40,000. That amount is less than the $100,000 maximum, so it is fully insured.

Summary of Insurance Coverage:

19. Does the use of different Social Security numbers affect the coverage of joint accounts?

No. As noted earlier, the use of Social Security numbers does not determine insurance coverage, nor does rearranging the owners' names, changing the style of the names, or using "or" rather than "and" to join the owners' names in a joint account title.

20. What types of joint accounts are insured?

Federal deposit insurance covers joint accounts owned in any manner conforming to applicable state law, such as joint tenants with a right of survivorship, tenants by the entireties, and tenants in common.

21. What is the effect of community property laws?

Community property laws do not affect deposit insurance coverage. In states recognizing this form of ownership, an account in the sole name of one spouse will be insured as the single ownership account of that spouse. Separately, a qualifying joint account in the names of both spouses will be insured as a joint account.

22. What happens when an account fails to qualify for separate insurance in the joint account category?

A deposit account held in two or more names that does not qualify for joint account deposit insurance coverage is treated as being owned by each named owner as an individual, corporation, partnership, or unincorporated association, as the case may be, according to each co-owner's actual ownership interest. As such, each owner's interest is added to any other single ownership accounts or, in the case of a corporation, partnership, or unincorporated association, to other accounts of such entity, and the total is insured up to $100,000.