Financial Institution Employees Guide to Deposit Insurance

Federal Deposit Insurance Corporation Financial Institution Employee's Guide to

Deposit Insurance

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UPDATED 2016

2016 Edition

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Table of Contents Introduction.........................................................................................10

About the Employee's Guide Important Disclaimers Effective Date Deposit Insurance Basics.........................................................................12 FDIC's Deposit Insurance Program FDIC Official Sign Standard Maximum Deposit Insurance Amount ("SMDIA") Deposits in Excess of the Insurance Limit FDIC Deposit Insurance is Provided for "Deposit" Products Types of IDI Products that the FDIC Does Not Insure FDIC Will Rely on IDI Deposit Account Records Deposit Account Records Deposits Maintained by Non-United States Citizens or Residents Deposits Denominated in a Foreign Currency Deposits in Insured Branches of Foreign Banks Deposits Outside the United States International Banking Facility (IBF) Deposits Effect of State Law Right of Offset Offset Requirements

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General Principles of Insurance Coverage ...................................................19

Separate Insurance Is Provided to Each Depositor

Insurance Is Provided on a Per-IDI Basis

Separate Insurance Is Provided For Deposits in Different Ownership "Rights and Capacities"

All Types of Deposits in the Same Ownership Category Are Combined

Minimum Information Required to Calculate FDIC Coverage for Deposit Accounts

Account Ownership Categories.................................................................25

Single Accounts....................................................................................26

I. Definition II. Insurance Limit III. Requirements IV. Types Of Single Accounts

1. Individually Owned Accounts 2. A Fiduciary, Custodian, or Agency Account That is Held on Behalf of

One Natural Person Who is the Actual Owner of the Funds 3. "Decedent Account" or "Estate Account" 4. Sole Proprietorship Account (also called "Doing Business As" or

"DBA" Account) 5. Community Property Deposits Held in the Name of One Person V. Default Ownership Category (Reversion) VI. Individually Owned Funds Not Insured Under the Single Account Category

Joint Accounts....................................................................................34

I. Definition II. Insurance Limit III. Requirements

1. Co-owners Must be Natural Persons 2. Co-owners Must Have Equal Withdrawal Rights 3. All Co-owners Must Personally Sign the Signature Card IV. Co-owned Testamentary Accounts are Not insured as Joint Accounts V. DBA Account With Multiple Owners VI. Common Misconceptions

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Revocable Trust Accounts (Formal and Informal).........................................42 Disclaimer

I. Definition..........................................................................42 1. Informal Revocable Trust 2. Formal Revocable Trust

II. Insurance Limit...................................................................43

III. Requirements.......................................................................43 1. Trust Relationship Must be Reflected in the Account Title 2. Beneficiaries Must be Identified in the IDI records 3. Beneficiaries Must be Eligible

IV. Process for Calculating Coverage for Revocable Trust Accounts........50 1. Who are the Owners of the Revocable Trust Account(s)? 2. Who are the Primary Unique Beneficiaries Upon the Death of the Owners? 3. Are the Primary Unique Beneficiaries Eligible? 4. Are the Primary Unique Beneficiaries Identified in the IDI's Deposit Account Records (for informal trusts) or in the Trust Agreement (for Formal Trusts) Alive at the Time an IDI Fails? 5. What is the Dollar Amount or Percentage Interest Each Owner Has Allocated to Each Primary Beneficiary? 6. Does the Revocable Trust Owner have Other Revocable Trust Accounts at the Same IDI? 7. Are the Revocable Trust Accounts Properly Titled?

V. Five or Fewer Unique Beneficiaries Designated and Revocable Trust Deposits for Each Trust Owner Totaling $1,250,000 or Less.................................................53

VI. Six or More Unique Beneficiaries Designated and Revocable Trust Deposits Totaling Less than $1,250,000 Per Trust Owner..............................................................55

VII. Six or More Unique Beneficiaries With EQUAL Interests Designated and Revocable Trust Deposits Totaling More than $1,250,000 Per Trust Owner.........................................57

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