How You Can Insure More Than $100,000 at the Same Bank

In light of the all the news about bank failures, I thought this little tidbit from last Monday’s Wall Street Journal might be helpful. It comes in the form of a Q&A article about what the FDIC insures. Here’s the Q&A I wanted to highlight:

Q: What do depositors do if they have more than $100,000 they need to put in the bank?

A: One way to protect the money is to hold accounts under that sum at a few separate banks. For those wanting to keep money at the same institution, perhaps for convenience’s sake, a sound strategy is to open different accounts.

For instance, a married couple could each open an individual account (up to $100,000 in each), a joint account (up to $200,000), two separate individual retirement accounts ($250,000 each) and two revocable trust accounts, payable on death, naming each other as beneficiaries ($100,000 each). Together that is more than $1 million of insured deposits.

Also, they could set up additional revocable trusts insured up to $100,000 for other qualified beneficiaries such as parents, siblings, children and grandchildren.

The follow-up question is also important:

Q: Are there any pitfalls to this multiple-account, single-bank approach?

A: Depositors should make sure their accounts are properly titled at the bank. Bank employees may not always know the correct distinctions.

Because of misinformation from Countrywide Financial Corp., “I had $100,000 in funds uninsured for a considerable amount of time,” says Scott Marberblatt of Swampscott, Mass. He held $100,000 in a certificate of deposit and put $100,000 in a savings account with two beneficiaries. But the bank did not properly title the savings account with the words “In Trust For,” so the second $100,000 went uninsured.

If Countrywide had failed — it ended up being acquired by much stronger Bank of America Corp. — then he would have had a problem.

To verify all accounts are FDIC-insured, contact the FDIC consumer hot line at 1-877-275-3342 or use the deposit insurance calculator at

The FDIC website also has lots of useful information. You might want to start with When a Bank Fails – Facts for Depositors, Creditors, and Borrowers.

Oh, and one last thing…

According to this MSNBC article, an FDIC chairwomen is predicting that more banks are going to fail but that the number of failures will be in the ‘low range’ historically. From the article:

Of the 8,500 banks in the country, 90 were in trouble in the first quarter. The FDIC does not disclose the banks’ names.

“That number will go up and the number of assets will go up, but it will still be a fairly low range when you look at this historically,” Bair said.

Only 13 percent of banks that make the list fail, on average, [FDIC chairwoman, Sheila] Bair said. Most are nursed back to health or acquired by stronger institutions, she said.

I guess that’s good news unless you are a customer at one of those failing banks!

6 thoughts on “How You Can Insure More Than $100,000 at the Same Bank”

  1. don’t ever even have close to 100k at a bank! open an account at a discount broker (schwab scottrade tdameritrade vanguard fidelity…) of your choice.

  2. It is very important to ensure that the accounts are titled properly. Some people mistakenly believe that each account is insured for the maximum, but that cannot be more incorrect as for each titling of accounts, it is the total amount that is insured. For all accounts held in the same institution with the same titling (ie: an individual accountholder) the total of all accounts up to $100,000 will be insured. Anything over that amount in total will be uninsured. The FDIC has a nice little PDF that explains the whole insurance thing:

  3. If you need more FDIC insurance, you may want to check out the CDARS system. A local bank can farm out CDs to other banks in order to provide up to $50 million in insured deposits… Not that most of us need that kind of insurance anyway!

  4. The FDIC was formed in 1933 when it determined that 100K was enough insurance. Well 100K back then was a lot of money, today it is not. Bank accounts today should be insured up to 500K in my opinion. If you have 500K it seems silly to have to randomly pick 6 different banks based on their chances of survival instead of based on their rate of return.

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