Q-What is the FDIC? A-FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects against the loss of insured deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC’s creation in 1933, no depositor has ever lost even one penny of FDIC-insured funds. Q-What types of accounts are eligible for FDIC Insurance? A-Checking, savings, money market, NOW and certificates of deposit.
Q-Effective October 3, 2008, as part of the Emergency Economic Stabilization Act of 2008, insurance coverage for deposit insurance coverage limits temporarily changed from $100,000 to what amount? A-$250,000 which was extended on September 9, 2009 to December 31, 2013.
Q-Can a customer increase their insurance coverage by opening accounts at different locations of the same bank? A-No, all locations of a bank with the same charter are collectively insured.
Q-IRAs and certain retirement accounts are covered for $250,000. Are they subject to the temporary timeframe of December 31, 2013? A-No, the change in coverage for IRAs and certain retirement accounts was made previous to the recent change and is permanent. Q-What is the additional coverage on deposits covered by the FDIC's Transaction Account Guarantee portion of its Temporary Liquidity Guarantee Program adopted August 26, 2009? A-Personal and business non-interest bearing deposit transaction accounts are fully insured for the entire amount of the deposit account. All IOLTA and Now accounts that earn 0.25% or less also have unlimited deposit insurance coverage. The insurance coverage is temporary and will remain in effect for participating institutions until December 31, 2010.
Q-Does Regent Bank participate in the FDIC's Transaction Account Guarantee Program? A-Regent Bank is participating in the FDIC's Transaction Account Guarantee Program.
Q-What determines deposit insurance coverage limits? A-All accounts under the same legal ownership category are treated as one account at each FDIC-insured bank. For calculating FDIC insurance, the most important question to ask is “who owns the funds?” Q-What is a deposit insurance category and why is it important? A- A category is a unique set of rules which entitles depositors to both: - the amount of coverage that is provided by the ownership category; and, - separate coverage from funds deposited under a different ownership category. Q-What are the basic deposit insurance ownership categories? A-Single Accounts (owned by one person); - Joint Accounts (owned by two or more persons); - IRAs and certain retirement accounts; - Trust Accounts - Revocable and Irrevocable; - Corporation, Partnership and Unincorporated Association Accounts; - Employee Benefit Plan Accounts; and, - Government Accounts.
Q-If a customer titles accounts differently (for example changing the order of names on a joint account) but they are under the same ownership would the owner be entitled to more insurance? A-No. If the funds are under the same owner, the title of the account does not increase insurance.
Q-What ownership category is a sole proprietorship? A-Funds owned by a sole proprietorship are considered to be owned by the individual owner of the business and are combined with the individual’s funds to determine insurance coverage. Q-What are the two types of trust accounts for insurance purposes? A - Irrevocable and Revocable
Q-What are the two types of revocable trusts covered by FDIC insurance? A-Informal- commonly known as payable-on-death accounts, customer designates the name of the beneficiaries on the signature card Formal - living trust accounts created for estate planning purposes
Q-Effective September 26, 2008, the FDIC simplified its rules for the insurance of revocable trust accounts commonly known as payable-on-death accounts or living trusts. Previously, only certain qualified family relationships were eligible for insurance coverage. Who now qualifies as a beneficiary? A-The beneficiary can be any natural person (living), charity or non-profit organization.
Q-How is the maximum coverage determined for each account owner with five or fewer beneficiaries and total combined revocable trust deposits balances of $1.25 million or less at a single bank? A-The maximum coverage will be determined by multiplying the number of different beneficiaries by $250,000 regardless of the percentage interest of the beneficiaries.
Q-When opening a deposit account for a revocable payable-on-death account is it necessary to include the names of the beneficiaries in the bank records? A-Yes, the FDIC recommends that the names of the beneficiaries are documented in the bank records.
Q-What products and services are not covered by FDIC insurance although they may be offered by banks? A-Stocks, bonds, mutual fund shares, life insurance policies, annuities and municipal securities.
Q-Does FDIC insure safe deposit boxes? A-The FDIC does not insure safe deposit boxes or their contents. Q-What on-line tool is available though the FDIC to help determine FDIC coverage? A-The FDIC’s Electronic Deposit Insurance Estimator (EDIE) is located on the FDIC webpage at www.fdic.gov. Additional assistance is available through the FDIC Call Center at 1-877-275-3342.
Q-If a customer is looking for a way to keep large deposits safe and they are not covered at Regent Bank, what is a potential solution we can offer? A-Open a CD through CDARS, a safe and sophisticated financial network of well-capitalized banks throughout the country. Using CDARS, Regent Bank submits depositor funds for placement at member banks in increments of less than $100,000 so that both the principal and interest are eligible for complete FDIC protection. Coverage is up to $50 million. The customer enters into one agreement, receives one rate and one statement. Additional information about CDARS is available on the Regent Bank website.
