If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

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GrayS26
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If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by GrayS26 »

Let’s say 250K is in a savings account at FDIC insured bank 1.

And another 250K is in a savings account at FDIC insured bank 2.

Will they get their money back from the FDIC if one or both banks fail?

If there’s interest accrued in one or both of the savings accounts, then would that not be covered since it’s over 250K?

I’m just trying to understand how it works. Thanks.


This would be for a savings account for one person. Not a joint. There will be beneficiaries.
Last edited by GrayS26 on Fri Oct 12, 2018 4:40 pm, edited 1 time in total.
DrCheese
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by DrCheese »

Yes, the entire 500k is insured by the FDIC if you keep 250k at two separate banks.

Anything over 250k will not be insured.

Regarding Beneficiaries:

Number of Unique Beneficiaries Maximum Deposit Insurance Coverage
1 Beneficiary $250,000
2 Beneficiaries $500,000
3 Beneficiaries $750,000
4 Beneficiaries $1,000,000
5 Beneficiaries $1,250,000
Last edited by DrCheese on Fri Oct 12, 2018 4:44 pm, edited 1 time in total.
oysterboy
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by oysterboy »

Yes, both accounts are covered. Regarding any overage from accrued interest, the account is still covered, but only up to $250K.
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nisiprius
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by nisiprius »

Yes, they are, and FDIC has an online interactive tool you can use to work through this and verify it for yourself. Better to check for yourself than to trust a stranger on the Internet.

EDIE

And as long as you're fussing with it anyway, you might as well take five minutes here:

https://research.fdic.gov/bankfind/

to verify that your bank is really a member of the FDIC, and not wonder whether they put a fake decal on their door...

...and

https://www.bankrate.com/rates/safe-sou ... earch.aspx

(not a government service, just a website that help find high-interest-rate bank accounts and so forth)

that will give your a "financial strength" rating for your bank, which will help you to decide whether there's any chance you will need the deposit insurance.

For what it's worth--and this was a long time ago, during the S&L crisis, so we weren't using ATMs and Internet access--I had important money at a credit union that failed, that had NCUA deposit insurance, and it was a non-event, not the slightest inconvenience to me. At about the same time a co-worker had money in a bank that failed, with FDIC insurance, and, again, there was nothing to it. There was one sign on the door Friday, another sign on the door Monday, and a "welcome to NuBank" package in the mail a few days later.
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GMCZ71
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by GMCZ71 »

My parents were doing the same thing at 2 banks and about to go to a 3rd bank. I sent them info on CDARS.
The Certificate of Deposit Account Registry Service (CDARS) is a service that enables banks to provide customers with FDIC-insured certificates of deposit through the CDARS network. When a customer deposits a sum of money greater than $250,000, the excess funds are placed into certificates of deposit issued by other banks in the network. Banks rely on CDARS deposits as a stable source of core funding.
https://www.fdic.gov/regulations/laws/f ... 0ad35.html

Luckily one of their current banks was part of the CDARS system. Since my Dad has passed it is much easier for Mom to have the cash at one bank and it spreads it out to other banks in the network to stay within the $250k fdic. (I know too much cash, its her choice)

https://www.cdars.com/home/find/find-cdars
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Cheyenne
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by Cheyenne »

So I guess that means if someone wins $10 mil. in the lottery and wants to park it temporarily, they will need accounts at 40 banks. Right?
Stormbringer
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by Stormbringer »

Cheyenne wrote: Sat Oct 13, 2018 9:46 am So I guess that means if someone wins $10 mil. in the lottery and wants to park it temporarily, they will need accounts at 40 banks. Right?
For a temporary deposit in a healthy economy, that seems excessively paranoid. Just don't put it in some single-branch mom and pop bank. In any event, I don't think you would have a choice. The lottery commission is going to hand you a single check, not 40 of them.
“The greatest shortcoming of the human race is our inability to understand the exponential function.” - Albert Allen Bartlett
Cheyenne
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by Cheyenne »

The lottery commission is going to hand you a single check...
Well, maybe I'll just cash it then (if it happens). :D
sport
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Re: If someone keeps 500K in two different FDIC insured bank accounts, 250K at each, are they still covered?

Post by sport »

There is one other thing to be aware of. Sometimes one bank is owned by another bank with a different name. However, they may be considered as one by the FDIC. So, you would want to avoid this situation.
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