FDIC Explained

You may wonder how FDIC coverage works and how it applies to your Home Federal accounts. Here are the latest updates to Home Federal’s FDIC coverage:

Maximum Deposit Insurance Amount Permanently Raised to $250,000

On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.

Informational Video

To view an informational video about FDIC Insurance, please click here.
(A new window will open; this video is provided by BVS.)

FDIC Insurance Overview

As your financial advisor, we are here to help make sure your deposits are safeguarded with FDIC insurance. Your banker is experienced in how to configure your accounts to maximize your FDIC protection. In addition, your banker is trained on the recent updates to FDIC insurance and can explain how these changes may affect your accounts. Below is an overview of the most recent changes put in place by the FDIC:

FDIC insurance covers funds in deposit accounts, including checking and savings accounts, money market deposit accounts and certificates of deposit (CDs). FDIC insurance does not, however, cover other financial products and services that insured banks may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or municipal securities.

To ensure funds are fully protected, depositors should understand their coverage limits. The FDIC provides separate coverage for deposits held in different account ownership categories. The coverage limits shown in the chart below refer to the total of all deposits that an accountholder has in the same ownership categories at each FDIC-insured bank. The chart shows only the most common ownership categories that apply to individual and family deposits, and assumes that all FDIC requirements are met.

Basic FDIC Deposit Insurance Coverage Limits
Single Accounts (owned by one person) $250,000 per owner
Joint Accounts (two or more persons) $250,000 per co-owner
IRAs and certain other retirement accounts $250,000 per owner
Trust Accounts $250,000 per owner per beneficiary subject to specific limitations and requirements
Corporation, Partnership and
Unincorporated Association Accounts
$250,000 per corporation, partnership or unincorporated association
Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable interest of each participant
Government Accounts $250,000 per official custodian

By consulting with your banker, you can ensure that you are taking full advantage of FDIC insurance coverage on your deposits. In fact, coverage may be extended far beyond $250,000 by structuring your accounts to maximize your coverage.

See the example below of how a husband and wife structured their accounts to have their accounts FDIC insured up to $2,000,000.

HUSBAND & WIFE
Individual Accounts:
Husband $250,000
Wife $250,000
Joint Tenancy (with right of survivorship)
Husband & Wife $500,000
Revocable Trust Accounts:
Husband as Trustee for Wife $250,000
Wife as Trustee for Husband $250,000
Certain Retirement Accounts:
Husband $ 250,000
Wife $ 250,000
  $2,000,000

Home Federal offers an additional service called the Certificate of Deposit Account Registry System (CDARS), a convenient solution for large deposit investors. CDARS customers enjoy full FDIC insurance on deposit amounts larger than $250,000 by breaking down the large deposit into smaller amounts and placing them in the CDARS network. Contact your banker if you are interested in learning more about this service.

*Video provided by BVS

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