FDIC Insurance Limit Question

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LongDistanceRunner
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Joined: Fri Sep 25, 2009 12:00 pm

FDIC Insurance Limit Question

Post by LongDistanceRunner »

If an FDIC bank account is a joint account, I believe it is insured up to $500,000 ($250,000 for each depositor).
If one the insured dies, is the account still insured to the $500,000 amount? If not, does the limit immediately
get reduced to $250,000. Or is there some grace period of time for the surviving account holder have
to reduce the account balance to 250K or less so that the account holdings are still insured?
LDR | | "Work like you don't need the money. | Love like you've never been hurt. | Dance like nobody's watching." - Satchel Paige
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HueyLD
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Re: FDIC Insurance Limit Question

Post by HueyLD »

“ To ensure that families dealing with the death of a family member have adequate time to review and restructure their accounts if necessary, the FDIC will insure the deceased owner’s accounts as if he or she were still alive for six months after his or her death. During this grace period, the insurance coverage of the deposit owner's accounts will not change unless the accounts are restructured (i.e., retitled or replaced to reflect the change in ownership of the deposit funds) by those authorized to do so. The FDIC will not apply the grace period in the rare event that the application of the grace period would cause a reduction in the amount of deposit insurance coverage.”

https://www.fdic.gov/deposit/diguideban ... -owner.pdf
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AAA
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Re: FDIC Insurance Limit Question

Post by AAA »

HueyLD wrote: Sat Nov 21, 2020 5:34 pm The FDIC will not apply the grace period in the rare event that the application of the grace period would cause a reduction in the amount of deposit insurance coverage.”
Just curious what this rare event might be.

There is another sentence at the end of the paragraph you quoted which might be of general interest:"Also, there is no grace period upon the death of a beneficiary of a deposit account and, therefore, there may be an immediate reduction of deposit insurance coverage."
Last edited by AAA on Sat Nov 21, 2020 8:49 pm, edited 1 time in total.
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LongDistanceRunner
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Re: FDIC Insurance Limit Question

Post by LongDistanceRunner »

Huey
Thank you very much for the answer to my question.
LDR | | "Work like you don't need the money. | Love like you've never been hurt. | Dance like nobody's watching." - Satchel Paige
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