Does adding beneficiary increase FDIC insurance $100,000?

[nym9]

NY State.

Some banks tell me the only way to increase my FDIC is to add an individual to my account and make it a joint account.

Some banks tell me if I add an individual to my account as a beneficiary, it will increase my FDIC insurance $100,000.

Which is correct?

[Debt Guy]

Which is correct?

Neither. Both.

The answer is not always simple. Go the the FDIC website and read about insurnance of account rules.

The key lies in the way the account is "styled" or "owned".

For example,

• You have an account -- insurance is max $100k
  Your spouse has an account -- insurnace is max $100k
  You and spouse have a joint account -- insurance is max $100k
  You have account with spouse as beneficiary -- insurnace is max $100k
  Spouse has account with you as beneficiary -- insurance is amx $100k

So, two people can have $500k in insurance at one bank -- but only $100k per account. The key is the ownership types.

Make sense?

[debtcollector`]

Respectfully, if that is something with witch you have cause to be concerned, you should talk to your attorney, accountant and financial planner about how to handle that money.

DC

[nym9]

Originally Posted by Debt Guy

Which is correct?

Neither. Both.

The answer is not always simple. Go the the FDIC website and read about insurnance of account rules.

The key lies in the way the account is "styled" or "owned".

For example,

• You have an account -- insurance is max $100k
  You and spouse have a joint account -- insurance is max $100k
  You have account with spouse as beneficiary -- insurnace is max $100k

I thought if spouse and I have one joint account, the max is $200k for that account? Or are you adding the $100k from my other account?

What I did not know was that adding a third account, with spouse as beneficiary, adds another $100k, total of $300k in one bank for three accounts, all them with one individual as the (primary) account holder.

[Bruno]

The basic insurance limit is $100,000 per customer per type of deposit, although there are ways to get additional insurance by opening different types of accounts - such as retirement, joint and trust accounts.

Customers can find out whether their accounts exceed the limit by using the electronic deposit insurance estimator at www2.fdic.gov/edie or calling (877) 275-3342.

[nym9]

Originally Posted by Bruno

The basic insurance limit is $100,000 per customer per type of deposit, although there are ways to get additional insurance by opening different types of accounts - such as retirement, joint and trust accounts.

Customers can find out whether their accounts exceed the limit by using the electronic deposit insurance estimator at www2.fdic.gov/edie or calling (877) 275-3342.

Thats what my question is about, the details on how to get more than $100k

I know one way is a joint account, brings $200k

Not interested in retirement accounts, but what I want to know is about adding a beneficiary, because most banks tell me this doesn't add $100k, but FDIC website seems to indicate it does.

[Debt Guy]

I don't know what fatwallet is but my suspicion is that it will make you a thin wallet -- you already have enough junior level tellers and clerks at different banks getting you confused -- stay away from anyone who is trying to sell you something.


go to this link at the FDIC

[url]http://www.fdic.gov/deposit/deposits/insured/yid.pdf[/url]

it explains all about the insurance rules.,

If you want, send me an email and give the details of what you are trying to do and I'll show you the easiest way to get it done at your local bank

my email is [email]debtguy@hotpop.com[/email]

[Bruno]

By no means I am promoting other Web sites ... But I would like to pose this question to Debt Guy:

Let's say there is a kid in the picture plus additional PODs on both spouses.

Husband account with POD to child - $100k
Husband account with POD to wife - $100k
Wife account with POD to child - $100k
Wife account with POD to husband - $100k

Does that mean there is a total $800k coverage for the whole family of 3 (husband, wife, child)?

Joint account with you and your wife as account holders: total $200K FDIC insured
Single account with you as account holder: total $100K FDIC insured
Single account with your wife as account holder: total $100K FDIC insured

Maximum money for you and your wife in single and joint accounts insured by FDIC: $400K

This is from the FDIC Web site:

Example: Bill has a $100,000 POD account with his wife Sue as beneficiary. Sue has a $100,000 POD account with Bill as beneficiary. In addition, Bill and Sue jointly have a $600,000 POD account with their three children as equal beneficiaries.

Account Title Account Balance Amount Insured Amount Uninsured
Bill POD to Sue $ 100,000 $ 100,000 $ 0
Sue POD to Bill $ 100,000 $ 100,000 $ 0
Bill & Sue POD to 3 children $ 600,000 $ 600,000 $ 0
Total $ 800,000 $ 800,000 $ 0

These three accounts totaling $800,000 are fully insured because each owner is entitled to $100,000 of coverage for the interests of each qualifying beneficiary in the accounts. Bill has $400,000 of insurance coverage ($100,000 for the interests of each qualifying beneficiary _ his wife in the first account and his three children in the third account). Sue also has $400,000 of insurance coverage ($100,000 for the interests of each qualifying beneficiary _ her husband in the second account and her three children in the third account).

P.S.: More facts here: http://www.fdic.gov/consumers/consumer/news/cnspr06/leadstory.html

[nym9]

I got some answers from the bank.

The confusion was because the bank I deal with - ING - does not offer POD beneficiary accounts.

Being a primary account holder, I can have a single acount (100k) and a joint account (100k for me 100k for other party), total of 300k.

So the answer is: Yes, when possible; I could add a beneficiary to the single account making it a POD and adding 100k, for a total of 400k.

[Bruno]

I am glad it worked out for you. I believe Debt Guy gave you some good head start (guideline), but (I believe) he was incorrect in his $500K number as well as his quote of "You and spouse have a joint account -- insurance is max $100k," which should have been $200K. As I stated before, for more information please see http://www.fatwallet.com/t/52/758675, which directly addresses your original question.

[moburkes]

Bruno, next time ask OP to turn on his PMs. Fatwallet is a for-profit site, which is why you shouldn't post the link on the boards.

[nym9]

Originally Posted by Bruno

I am glad it worked out for you. I believe Debt Guy gave you some good head start (guideline), but (I believe) he was incorrect in his $500K number as well as his quote of "You and spouse have a joint account -- insurance is max $100k," which should have been $200K. As I stated before, for more information please see [url]http://www.fatwallet.com/t/52/758675[/url], which directly addresses your original question.

Now there it says the answer is NO, adding one beneficiary does not increase the insurance at all.

Being a primary account holder, I can have a single acount (100k) and a joint account (100k for me 100k for other party), total of 300k.

If I add a beneficiary to the single account making it a POD, it does NOT add $100,000 according to Fatwallet

[Bruno]

That's the purpose of any forum. Be my guest and hash it out with them. And keep us posted of the final verdict.

[Debt Guy]

Bruno -- per your question:

Husband account with POD to child - $100k
Husband account with POD to wife - $100k
Wife account with POD to child - $100k
Wife account with POD to husband - $100k

Does that mean there is a total $800k coverage for the whole family of 3 (husband, wife, child)?

Joint account with you and your wife as account holders: total $200K FDIC insured
Single account with you as account holder: total $100K FDIC insured
Single account with your wife as account holder: total $100K FDIC insured

Maximum money for you and your wife in single and joint accounts insured by FDIC: $400K

The answer is $700k of insurance. The error in the thought process is the ideas that the joint account has $200k insurance because it has two names on it. Using that theory, it would be insured to $1million if it had 10 names.

For the OP

You've not said exactly what combination of parties are involved. Without knowing that, it is not possible to give you the exact answer. But, as a guideline each of the following would be insured for $100K each:

1. Account in your name only.
2. Account in spouse's name only.
3. Joint account you and and spouse.
4. Account in your name with spouse as beneficiary.
5. Account in spouse name with you as beneficiary.
6. Account in your name with Child 1 as benefciary.
7. Account in spouse name with Child 1 as beneficiary.
8. Account in your name with Child 2 as beneficiary.
9. Account in spouse name with Child 2 as beneficiary.

Get the idea?

If that is not enough, you go to Bank #2 and start all over.

I think the problem is that you are dealing with a salesperson at ING would has not a clue. ING is a foreign bank (they have a domestic subsidiary for insurance purposes) but their sales people mostly sell securities. The salesman does not make much commission for selling a CD.

I think you would get a much more concise and technically accurate answer to go a real bank (BofA, Chase, etc.) and get a brochure. They would be happy to give you one.

[Bruno]

Well, you basically say: Accounts in different ownerships (such as beneficial ownership, trusts, and joint accounts) can be considered separately for the $100,000 insurance limit. I assert: FDIC is per person, not per account. Each person can be insured for up to $100,000 per bank (not per account). So you can have one account with $200,000 if it has two signers, and it would be completely insured. But any additional funds at the SAME bank would not be insured. And yes, if there were a law allowing 10 names, then you could have one account with a $1,000,000 insurance.

Regarding ING, they have an online banking unit in the US that goes by the name ING DIRECT. This is pure online banking with no bricks & mortar branches. I believed they are one of the oldest (pioneers of) online banks here.