Isn't That Rich Podcast

Imagine waking up to news of your bank closing its doors, but rather than panic, you rest easy knowing that every penny of your hard-earned money is protected. Most people think FDIC insurance only covers up to $250,000, but what if we told you that, with the right strategy, you could insure millions? Welcome to a smarter way of banking that ensures peace of mind.

Understanding FDIC Insurance

FDIC insurance is a safeguard that covers depositors' accounts at each insured bank, dollar for dollar, including principal and interest, up to the insurance limit of $250,000 per depositor. This federal protection ensures that your money is safe in the event of a bank failure. However, many people are unaware that they can be insured for amounts well beyond $250,000 by strategically structuring their accounts.

Beyond the $250,000 Limit

A common misconception is that to stay within the $250,000 insurance limit, you need to spread your money across multiple banks. In reality, you can be insured for much more than $250,000 at a single bank by utilizing different account categories and ownership structures.

Types of Accounts Covered by FDIC Insurance

FDIC insurance extends to various types of accounts, providing robust coverage for your deposits. Here are some of the account types that are covered:

1. Checking Accounts: Your everyday checking accounts are insured up to the limit.
2. Savings Accounts: Savings accounts, including high-yield savings accounts, are protected.
3. Certificates of Deposit (CDs): Both short-term and long-term CDs are covered.
4. Individual Retirement Accounts (IRAs): Certain IRAs are insured, adding an extra layer of security to your retirement savings.
5. Money Market Deposit Accounts: These accounts, often offering higher interest rates, are also insured.
6. Cashier's Checks: If a bank issues a cashier's check that you haven't yet cashed, it is insured.

What’s Not Covered?

While FDIC insurance is comprehensive, it does not cover all financial products. Here are some notable exclusions:

• Investment Products: Stocks, bonds, and mutual funds are not covered.
• Life Insurance Policies: These are not insured by the FDIC.
• Annuities and Municipal Securities: These investment vehicles are also excluded from FDIC coverage.

Structuring Your Accounts for Maximum Coverage

The key to ensuring more than $250,000 lies in how you structure your accounts. By using different ownership categories, you can significantly increase your insured amount.

1. Single Ownership Accounts: If you have an account in your name only, without any joint owners or beneficiaries, it is insured up to $250,000. This applies collectively to all accounts under this category, such as checking, savings, and CDs.
2. Joint Accounts: Joint accounts are insured up to $250,000 per co-owner. For example, if you have a joint account with your spouse, it is insured up to $500,000. Each additional co-owner adds another $250,000 in coverage.
3. Revocable Trust Accounts: These accounts can have multiple beneficiaries and are insured based on the number of owners and beneficiaries. For instance, if you and your spouse have a trust with three beneficiaries, the account can be insured up to $1.5 million ($250,000 per owner, per beneficiary).
4. Retirement Accounts: IRAs and other retirement accounts are insured separately up to $250,000 per owner. This coverage is in addition to other account types.
5. Business Accounts: Business accounts are insured up to $250,000 per tax ID number. This includes both sole proprietorships and corporations.

Using FDIC Calculators for Assurance

To help depositors understand their insurance coverage, the FDIC offers an online calculator. By inputting your accounts and ownership details, you can verify if your deposits are fully insured. Farmers State Bank also provides personalized assistance to review and structure your accounts to ensure maximum coverage.

Beyond Traditional FDIC Insurance: Additional Options

For those needing coverage beyond traditional FDIC limits, Farmers State Bank partners with Intrafi Network, a third-party company that collaborates with over 2,000 banks. This partnership allows individuals and businesses to be insured for millions of dollars without the hassle of managing accounts across multiple banks. Intrafi offers both checking and CD products, ensuring that your funds are both insured and earning interest.

The Importance of Regular Account Reviews

Life changes frequently, and so do your financial needs. It’s crucial to regularly review your accounts to ensure they are structured properly and that beneficiaries are up to date. Whether you’ve experienced significant life changes, such as marriage, the birth of a child, or retirement, reviewing your accounts ensures that your financial affairs are in order.

In Summary

Ensuring your deposits are adequately insured is essential for financial peace of mind. By understanding FDIC insurance and how to structure your accounts, you can protect more of your hard-earned money. If you have questions or need assistance, Farmers State Bank is ready to help.

For more information, visit the FDIC website at (https://www.fdic.gov), or stop by any Farmers State Bank location to speak with our knowledgeable staff. Ensuring your financial security is our top priority.