(1) Single Accounts—are the first ownership category under the FDIC rules; these are accounts that have one individual owner and no beneficiary. Single accounts owned by the same depositor at the same insured financial institution are aggregated, and the total is insured up to the basic coverage limit, which is temporarily $250,000 per depositor.

(2) Joint Accounts——those that have two or more owners and no beneficiaries—are a separate ownership category under the FDIC rules. Each co-owner’s respective share of each joint account at the same insured financial institution is aggregated, and the total is insured up to the basic coverage limit, which is temporarily $250,000. Thus, with a joint account, a husband and wife can qualify for up to $500,000 of insured deposits at the same insured financial institution. (In community property states such as California, accounts titled in the name of one spouse will be classified as a single account of the named spouse for insurance purposes, even though under state law the funds may be considered to be owned one-half by each spouse.) Because single accounts and joint accounts are treated as different categories, co-owners who also own single accounts may qualify for greater coverage. Let’s see how this works:

Mary has a single ownership account with $250,000. Mary and John also own a joint account with $500,000. One-half of the joint account ($250,000) is deemed held by Mary and one-half of the joint account ($250,000) is deemed held by John. Thus, the entire $500,000 joint account is insured as a joint account, and the entire $250,000 single account is also fully insured. As a result, the total value of these accounts is insured for $750,000. If John also has a $250,000 single account, the total coverage reaches $1 million.

(3)Retirement Accounts—Certain self-directed retirement plans are treated as a separate ownership category under the FDIC rules. The FDIC rules provide a coverage limit unique to retirement plan and employee benefits accounts, rather than the basic coverage limit. By coincidence, this unique retirement plan coverage limit has been and continues to be $250,000. The amount was not changed by the bailout law and will continue to apply after 2009.

All of an individual’s deposits in certain self-directed retirement accounts (for example, traditional IRAs and Roth IRAs, Keogh plans, etc.) at the same insured financial institution are added together and insured up to $250,000.

(4) Employee Benefit Accounts—The FDIC rules treat as a separate ownership category accounts maintained by employee benefit plans for multiple employees. Coverage for each account held by an employee benefit plan covering multiple participants is determined by using a “pass-through” concept that calculates the portions of the account that correspond to the respective interests of each participant in the plan, and provides coverage for the amount of each interest up to the retirement coverage limit of $250,000 each.

(5) Corporations, Partnerships, and Unincorporated Associations—Accounts for corporations, partnerships, limited liability companies (LLCs), and similar entities (including those operating as non-profit organizations) are recognized as another ownership category. Accounts for such an entity at one financial institution are subject to the basic coverage limit (temporarily $250,000), regardless of how many shareholders, partners, members, etc. may exist. In addition, non-interest bearing accounts held by any owner qualify for temporary unlimited coverage.

(6) Revocable Trust Accounts—The FDIC rules recognize certain accounts as revocable trust accounts and treat them as a separate ownership category. There are two types of accounts insured under this ownership category: the “informal” and “formal.” Informal trust accounts consist of a bank signature card on which the owner designates the names of beneficiaries to whom the funds will pass upon the owner’s death. These are usually referred to as “payable-on-death” (POD), “in-trust-for” (ITF), or “Totten Trust” accounts. Formal trust accounts are established in connection with written trust documents such as those created for estate-planning purposes. In either case, the individual owner has retained the right to revoke the arrangement.