Covering Your Assets: Part 1 – FDIC
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In light of recent events, many of our clients have asked the question of how their assets are covered. While the topic is nuanced, we wanted to provide you with some information regarding the two types of insurance: FDIC (Federal Deposit Insurance Corporation) and SIPC (Securities Investor Protection Corporation).
FDIC insurance covers traditional deposit accounts, and depositors do not need to apply for FDIC insurance. Coverage is automatic whenever a deposit account is opened at an FDIC-insured bank or financial institution. If you are interested in FDIC deposit insurance coverage, simply make sure you are placing your funds in a deposit product at the bank. |
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Deposit Products
The following are examples of deposit products which are insured by the FDIC*
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit (CD)
- Prepaid cards (assuming certain FDIC requirements are met)
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| *The amount of FDIC Insurance coverage you may be entitled to depends on the registration of the account. Below are examples of some of the registrations and how they are covered. |
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| **The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, and money market funds, even if these investments were bought from an insured bank. We will send out an email next week that will cover SIPC insurance and how it works with FDIC to cover your investments. |
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Individual Accounts
- All single accounts owned by the same person at the same bank are added together and insured up to $250,000.
Joint Accounts
- Each co-owner’s shares of every joint account at the same insured bank are added together and insured up to $250,000. For example, a joint account with 2 owners would be insured for up to $500,000.00
Trust Accounts
- All revocable trusts owned by the same person at the same bank are added together, and the owner is insured up to $250,000 per beneficiary.
- Irrevocable trusts typically have contingent interests which result in the trust being insured for a maximum of $250,000, regardless of the number of beneficiaries designated. However, the non-contingent interests of a beneficiary in all irrevocable trusts established by the same owner and held at the same bank are added together and insured up to $250,000.
Pension Plan Accounts
- The interests of each participant’s non-contingent interest under the plan is insured up to $250,000 per bank. For plans where the interests are contingent, such as health and welfare plans, the coverage is $250,000 for the plan itself.
Corporate Accounts
- All deposits owned by a corporation, partnership, or unincorporated association at the same bank are added together and insured up to $250,000, separately from the personal accounts of the owners or members.
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Covering Your Assets: Part 2 – SIPC
Coming Next Thursday, 4/27/23
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Earnings season is underway as companies continue to shed light on how they are faring in this high interest-rate environment. The results have been interesting, to say the least. While some companies have exceeded expectations with their results, others have experienced a decline in revenue or profit margins. In general, the results seem to be better than what investors predicted. We can expect to gain more insight into the overall trend for the earnings season next week, as a significant proportion of S&P companies will be reporting. For the week, the S&P 500, Dow Jones Industrial Average, and Nasdaq are all down 0.38%, 0.69%, and 0.88%, respectively, as of today’s close.
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Our next webinar is on “Cybersecurity and Data Protection” with Erin Donham, Senior Technology Consultant at Charles Schwab, and Joshua Garland, ChFC®, AIF®. It will take place next Wednesday, April 26, 2023 at 1pm PDT. Click here to register and learn more.
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| Have a wonderful week,
Rhonda Ducote, AIF®
President |
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