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FDIC Consumer News - Fall 2001

Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

  Special Report on FDIC Insurance 

Deposit Insurance 101: A Final Exam

1. I have a $200,000 "payable-on-death" account. I know the FDIC insurance limit is $100,000 but because I've named two beneficiaries—my niece and my nephew—the account is fully insured to $200,000. True or False?

2. All of my deposits in Individual Retirement Accounts at the bank are added together and insured up to $100,000. It doesn't matter how many IRAs I own or how many beneficiaries I name.True or False?

3. I have three separate joint accounts at the same bank—one for $100,000 with my spouse, another for $100,000 with my sister, and a third for $100,000 with my brother. Because I own each account with a different person, each account is insured for $100,000. True or False?

4. I have a $125,000 bank account but, to bring the funds under the FDIC insurance limit, I withdraw $75,000 in the form of a cashier's check. But before I deposit the cashier's check elsewhere, the bank fails. Because I received a cashier's check, which is the equivalent of cash, I have my $75,000 safely in hand and I've successfully reduced my account balance below the FDIC insurance limit.True or False?

5. I invest $95,000 in a bank CD sold by one brokerage firm and another $95,000 in another CD offered by a different brokerage firm. As it turns out, each broker independently places my money at the same bank... and that bank fails. Even though I used different brokers to buy the CDs, the funds are added together and insured to $100,000, leaving $90,000 uninsured. True or False?

6. If I have uninsured deposits but I can prove that I intended for that money to be within the insurance limit, the FDIC has the option to cover those deposits. True or False?

7. If my bank fails and I have uninsured funds, I may still recover money based on how much the FDIC collects liquidating the failed bank's assets. True or False?

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Last Updated 11/23/2001 communications@fdic.gov