FDIC Flashcards
What is the amount of FDIC insurance coverage?
$250,000
The death of a depositor will not affect insurance coverage for __ _____ following the owner’s death unless the deposit account is restructured.
6 months
If insured institutions merge, separate insurance of deposits continues for __ ____ after the date of the merger. CDs will continue to be insured separately until the first renewal that occurs __ ____ after the merger date.
6 months
How do sole proprietor accounts receive insurance coverage?
They will be treated as a single-account ownership.
How do funds owned by an individual in a revocable trust account with beneficiaries receive insurance coverage?
They will be insured up to the total number of different beneficiaries multiplied by the SMDIA (as long as each beneficiary has an equal share in the account).
Does a beneficiary have to be a natural person to receive FDIC insurance coverage?
No, it may be a natural person, charitable institution or other nonprofit entity.
Account Owner “A” has a payable-on-death account naming his niece and cousin as beneficiaries, and A also has, at the same FDIC-insured institution, another payable-on-death account naming the same niece and a friend as beneficiaries. What is the maximum insurance coverage available to the account owner?
The maximum coverage available to the account owner would be $750,000. This is because the account owner has named only three different beneficiaries in the revocable trust accounts–his niece and cousin in the first, and the same niece and a friend in the second. The naming of the same beneficiary in more than one revocable trust account, whether it be a payable-on-death account or living trust account, does not increase the total coverage amount.
Account Owner “A” establishes a living trust account, with a balance of $300,000, naming his two children “B” and “C” as beneficiaries. A also establishes, at the same FDIC-insured institution, a payable-on-death account, with a balance of $300,000, also naming his children B and C as beneficiaries. What is the maximum insurance coverage available for the account owner?
The maximum coverage available to A is $500,000, determined by multiplying 2 times $250,000 (the number of different beneficiaries times the SMDIA). A is uninsured in the amount of $100,000. This is because all funds that a depositor holds in both living trust accounts and payable-on-death accounts, at the same FDIC-insured institution and naming the same beneficiaries, are aggregated for insurance purposes and insured to the applicable coverage limits.
A and B, two individuals, establish a payable-on-death account naming their three nieces as beneficiaries. Neither A nor B has any other revocable trust accounts at the same FDIC-insured institution. What is the maximum insurance coverage available for the account holders?
The maximum coverage afforded to A and B would be $1,500,000, determined by multiplying the number of owners (2) times the SMDIA ($250,000) times the number of different beneficiaries.
For accounts held by government depositors, how will US accounts be insured?
Time, savings, and demand deposit accounts will be insured separately up to the SMDIA.
How will deposit accounts held by government depositors outside the state/territory be insured?
Funds will be aggregated and insured up to the SMDIA.
When maintaining an account involving a fiduciary, what must be done with the evidence of the fiduciary relationship?
A. It may be kept by the depositor in his or her records at home or at his or her place of business.
B. It must be expressly disclosed in the deposit account records.
C. It may be maintained by the depositor or the bank as long as the records are clear.
D. It must be forwarded to the FDIC at the time of account opening.
B. It must be expressly disclosed in the deposit account records.
ABC Bank failed with the following accounts for Fred Jones on its books:
* A certificate of deposit in the name of Fred Jones with a principal balance of $250,000 and accrued interest of $6,250
* An account for Fred Jones, for which Mr. Jones has now provided documentation showing that he opened the account as a payable-on-death account for his son; the account has a balance of $1,250,000
* An IRA for the benefit of Fred Jones with a balance of $250,000 * An account styled “Fred Jones, trustee for Nancy Jones and Roger Wilson” with a balance of $200,000; Nancy is Fred’s daughter, Roger is Fred’s brother
If the SMDIA is $250,000, how much of Fred’s money is insured?
A. $950,000
B. $750,000
C. $700,000
D. $500,000
C. $700,000
Fred’s certificate of deposit is a single ownership account and is insured for the full principal balance of $250,000. The interest is not insurable because it would put the account over the $250,000 limit. The account that Fred now claims was a revocable trust would be considered a single ownership account and would be aggregated with the certificate of deposit for purposes of determining the application of deposit insurance. The FDIC will rely only on the bank records in this case. The intention to make the account a revocable trust must be reflected on the records of the account. The IRA is fully insured. The revocable trust account for Fred’s daughter and brother is fully insured because both beneficiaries are eligible to be covered.
Assuming that the following are interest-bearing accounts at First National Bank and the SMDIA (Standard Maximum Deposit Insurance Amount) is $250,000:
Account Owners and Balances
Jim: $250,000
Fred: $350,000
Susan and Jim: $300,000
Jim and Fred: $180,000
Fred and Jim: $160,000
How much of Fred’s money is covered by deposit insurance?
A. $440,000
B. $500,000
C. $350,000
D. $340,000
A. $440,000
Under the SMDIA $250,000 limit, Fred’s single ownership account is insured to $250,000.The remaining $100,000 is uninsured. His one-half interest in the $180,000 joint account and his one-half interest in the $160,000 joint account are fully insured.
Where must the FDIC plaque be placed?
Anywhere where insured deposits are received and deposited.
