Name:	GoneFishin -	Reply
Subject:	FDIC Insurance
Date:	3/20/2023 10:51:55 AM

You often read that FDIC deposit insurance at a bank or credit union provides coverage up to $250,000 per person so that a joint account would be $500,000. The fact is it is $250,000 per person per type of account.

As an example, let’s assume there is Mary Smith and John Smith husband and wife. They have 2 children Bill and Amy. They have a joint account Mary and John Smith. The insurance is $500,000.

Mary has an individual account Mary Smith. That is a different type of account so Mary has $250,000 insurance.

John has an individual account John Smith. That is a different type of account so John has $250,000 insurance.

They are covered for a total of $1,000,000.

In addition, a little known fact is that beneficiaries named on an account can raise the amount of insurance even higher.

They could established the joint account with 2 beneficiaries…Bill and Amy. They would have to set up the account up as a POD or Payable on Demand. Basically, this means if Mary and John both die the account passes to the beneficiaries without going thru probate.

Rather than have 3 accounts, let’s assume the $1,000,000 was in a joint account..Mary and John Smith with 2 beneficiaries Bill and Amy. The insurance would be $500,000 since it is a joint account plus $250,000 for each beneficiary for another $500,000 for a total of $1,000,000.

I am not a banker, attorney, or accountant.

Name:	MartiniMan -	Reply
Subject:	FDIC Insurance
Date:	3/20/2023 4:15:01 PM

If this were the only issue with failing banks it might make a difference.  But when banks fail, small depositors and even the largest ones might be bailed out by the FDIC or the Feds but the shareholders and bondholders lose everything. 

What caused SVB to fail wasn't small depositors making a run on the bank.  It was caused by large, sophisticated depositors that saw the writing on the wall when SVB was forced to sell a portion of their bond portfolio at a loss.  While they maybe expected the Feds to eventually secure their deposits even if over whatever FDIC covered, they obviously weren't willing to take the risk or have their funds tied up for a period of time while the politics worked itself out.