FDIC EASE Formula: Coverage Caps, Beneficiaries, and Titling

FDIC trust account insurance coverage is calculated by multiplying the number of trust owners by the number of eligible beneficiaries by $250,000, up to a maximum of five beneficiaries per owner. That puts the ceiling at $1,250,000 per owner at a single insured bank, and $2,500,000 for a two-owner trust where each owner has named at least five eligible beneficiaries.¹ The rule sits in federal regulation at 12 CFR 330.10, and the FDIC’s free EDIE calculator will run the numbers for your actual accounts.

The Formula and the Caps

Owners times eligible beneficiaries times $250,000. That’s the whole calculation. One owner with three beneficiaries: $750,000 in coverage. One owner with five: $1,250,000. Naming a sixth or seventh beneficiary adds nothing, because coverage stops at five beneficiaries per owner.¹

Two-owner trusts are calculated separately for each owner and then combined. A married couple with a joint living trust naming five eligible beneficiaries can reach $2,500,000 at one bank.¹

Coverage per owner, by number of eligible beneficiaries:

1 beneficiary: $250,000
2 beneficiaries: $500,000
3 beneficiaries: $750,000
4 beneficiaries: $1,000,000
5 or more beneficiaries: $1,250,000

Which Trust Deposits Are Covered

As of April 1, 2024, the FDIC folded revocable and irrevocable trusts into a single “Trust Accounts” category under 12 CFR 330.10. All three types of trust deposits at the same bank are now added together and run through the same per-beneficiary formula:²¹

Informal revocable trusts: payable-on-death (POD), in-trust-for (ITF), and Totten trust accounts, where funds pass directly to named beneficiaries at the depositor’s death without a written trust agreement.
Formal revocable trusts: living trusts created through a written agreement, usually for estate planning, with the deposit titled in the trust’s name.
Irrevocable trusts: trusts established by statute or written agreement where the owner has given up the power to change or cancel the terms.

If you hold both a POD account and a separate irrevocable trust at the same bank, the FDIC adds those balances together before applying the coverage limit.

The Spousal-Only Trust Exception

If the co-owners of a revocable trust are also its only beneficiaries (a married couple who named only each other, for example), the FDIC treats those deposits as a joint account rather than a trust account.² Joint account coverage is $250,000 per co-owner, so the higher trust formula does not apply. Couples in that setup sometimes assume they have far more coverage than they actually do.

Who Counts as an Eligible Beneficiary

Not every name in a trust increases coverage. To qualify, a beneficiary must be:¹

A living natural person, adult or child.
A charitable organization recognized as tax-exempt under the Internal Revenue Code.
A non-profit entity recognized as tax-exempt under the Internal Revenue Code.

The trust’s owner cannot double as a beneficiary for this calculation. If you create a revocable trust and list yourself among the beneficiaries, you don’t add to the multiplier.¹

Unequal Shares Don’t Change the Math

The formula counts beneficiaries and ignores what each one gets. A trust that leaves 90% to one child and 5% each to two others still has three eligible beneficiaries and $750,000 of coverage. The FDIC has said explicitly that it doesn’t matter if some beneficiaries receive a greater share than others.¹ The rule works in the depositor’s favor here.

Titling and Records the Bank Must Have

Naming beneficiaries privately isn’t enough. The bank’s records need to show the trust relationship, or the FDIC will treat the deposit as a single-ownership account capped at $250,000.¹

For a formal revocable trust, the account title has to identify it as a trust, with language such as “The Smith Family Trust” or “John Smith, Trustee.” The FDIC looks for terminology in the title or the bank’s internal records that makes the trust status clear.¹

For informal revocable trusts like POD accounts, the standard is slightly different: the bank’s deposit records must name each beneficiary individually.¹ Telling the banker “it’s for my kids” without providing names won’t cut it. Banks subject to FDIC recordkeeping rules must maintain a unique identifier for each grantor and beneficiary in their systems.³

What a Death Does to Coverage

The rules split depending on who dies.

Death of the Trust Owner

The FDIC provides a six-month grace period after an owner’s death during which the account is insured as though the owner were still alive.⁴ The grace period cannot reduce coverage below what existed before the death; it only holds coverage steady while the family reorganizes.¹ Once six months pass without restructuring, coverage is recalculated based on actual ownership. A revocable trust that becomes irrevocable at the grantor’s death, for instance, gets re-evaluated under the new ownership structure.

Death of a Beneficiary

There is no grace period when a beneficiary dies. Coverage can drop the same day. If a trust with three beneficiaries and $750,000 of coverage loses one beneficiary, coverage falls to $500,000 immediately, unless the trust names a successor, in which case the FDIC counts the successor.¹ The asymmetry between owner and beneficiary deaths is easy to overlook and can leave deposits suddenly exposed.

Checking Your Own Coverage With EDIE

The FDIC’s Electronic Deposit Insurance Estimator, EDIE, is a free calculator at edie.fdic.gov that runs the formula on your actual accounts.⁵ For trust accounts, you’ll enter the grantor’s information, each beneficiary’s name and type (individual, charity, or non-profit), and whether the grantor and beneficiaries are still living. EDIE calculates coverage across all your accounts at a single bank and flags any balances that exceed the limit.

The tool is most useful when you hold several account types at the same bank, such as a POD account, a living trust, and an individual checking account. It handles each ownership category separately and shows where the totals overlap or leave gaps. Running your accounts through EDIE after a death, a divorce, or a new beneficiary takes a few minutes and can spare you an ugly surprise later.

1
FDIC.gov. Trust Accounts (12 CFR 330.10)
2
eCFR. 12 CFR 330.10 – Trust Accounts
3
eCFR. 12 CFR Part 370 – Recordkeeping for Timely Deposit Insurance Determination
4
eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
5
FDIC.gov. Electronic Deposit Insurance Estimator (EDIE)