My husband and I have four joint accounts at our bank: a $25,000 CD, a $20,000 CD, a $50,000 savings account and a
$1,000
checking account.
The bank said we could set up joint accounts until we had a total of $200,000 and that my husband and I would be covered by
FDIC for $100,000 each if the bank failed. I thought the total limit was $100,000 for joint accounts.
We also have a $50,000 CD at another bank. Is that subject to the same limit?
On April 1, 1999, a new law raised the FDIC limits on joint accounts. Now, FDIC will cover up to $100,000 for each person
listed on joint accounts at that bank. Because these limits are based on the type of ownership, not the number or type of
accounts, FDIC calculates your joint-account limit by adding up your share of any accounts you own jointly at that bank (half
the account total if there are two owners).
You and your husband are well below the cut-off -- $48,000 is insured in your name; $48,000 in your husband's name. You can
deposit another $104,000 into joint accounts at that bank and each still have full FDIC coverage. Plus, FDIC will cover each
of you for up to $100,000 in individual accounts and $100,000 in retirement accounts at that bank. Keep in mind, though, that
if one joint owner dies and you become the single owner of an account, you may suddenly exceed the limit.
The FDIC limits apply separately to each bank where you have accounts, so your $50,000 joint account at the other bank is
subject to its own $100,000 limit for each of you. This makes it easy to guarantee full coverage. If you have too much money
anywhere, consider moving some of it to another bank, where your limit will start from scratch. The reverse is true, though,
if two banks where you do business merge.
The rules can be complicated, but the FDIC has a great program on its Web site, called the Electronic Deposit Insurance
Estimator (EDIE), that walks you through the process and calculates your limits.
Remember: FDIC covers only deposit accounts (like CDs, savings accounts and checking accounts) -- not mutual funds and
annuities.