FDIC Ownership Categories: Coverage, Limits, and Exclusions

The FDIC groups deposits into ownership categories, and each category gets its own $250,000 insurance limit per depositor at each insured bank. A single person can hold well over $250,000 at one bank and still be fully insured, but only by spreading funds across categories that the FDIC treats as legally distinct. Deposits at different branches of the same bank are not separately insured, so ownership categories are the only lever for multiplying coverage at a single institution.¹

There are seven categories in the FDIC’s framework: single accounts, joint accounts, certain retirement accounts, trust accounts, employee benefit plan accounts, corporation/partnership/unincorporated association accounts, and government accounts. Each has its own rules for who counts as an owner or beneficiary, and those rules determine how much coverage you actually get.

Single Ownership Accounts

A single ownership account is any deposit held by one person with no beneficiaries named. All of your single ownership deposits at one bank, whether checking, savings, or CDs, are added together and insured up to $250,000 in total.²

Two account types quietly fall into this category. Sole proprietorship deposits, including accounts titled with a “Doing Business As” name, are combined with the owner’s personal single accounts under the same $250,000 limit. Accounts under the Uniform Transfers to Minors Act belong to the child, not the custodian, so UTMA funds are insured as the minor’s single ownership account.³ If a child also has a savings account in their own name at the same bank, that balance combines with the UTMA under the child’s single ownership limit.

Joint Ownership Accounts

Joint accounts are deposits held by two or more people with equal rights to withdraw. Each co-owner is insured up to $250,000 for their combined share of all qualifying joint accounts at the same bank.⁴ A married couple holding a single $500,000 joint account is fully covered because each spouse’s half stays within the limit. Joint coverage is entirely separate from single coverage, so that same couple could each also hold $250,000 in individual accounts at the same bank without exceeding any limit.

Two conditions must be met. All co-owners must be natural persons; a corporation or trust cannot be a co-owner. And every co-owner must have equal withdrawal rights. If the titling suggests one person can withdraw alone while others need consent, the account fails to qualify and each person’s share gets folded into their single ownership coverage instead.⁴

When a Joint Owner Dies

After a co-owner’s death, the FDIC treats the accounts as if that person were still alive for six months, giving the survivor time to restructure. Once the grace period ends, coverage depends on the new titling. A surviving spouse who becomes sole owner of what had been a $500,000 joint account would see only $250,000 of that balance insured, since it now falls under single ownership.⁵

Trust Accounts

Trust accounts get the most generous formula of any category, and the rules changed on April 1, 2024. Revocable and irrevocable trust deposits at the same bank are now combined under one calculation: $250,000 per eligible beneficiary, per trust owner, up to a maximum of $1,250,000 per owner.¹ Naming more than five beneficiaries does not raise the cap.

The math is straightforward: number of owners multiplied by number of eligible beneficiaries multiplied by $250,000, subject to the $1,250,000 per-owner ceiling.⁶ Three beneficiaries yields up to $750,000; five or more maxes out at $1,250,000. A married couple with mirror trusts naming three children could insure up to $1,500,000 in trust deposits at a single bank.

What Qualifies as a Trust Account

Both informal and formal trusts count. Informal trusts include Payable-on-Death and In-Trust-For accounts, where beneficiaries appear in the bank’s deposit records even if not in the account title. Formal trusts include living trusts and family trusts, where the account title should identify it as a trust with language like “living trust” or “family trust.”⁶

Who Counts as an Eligible Beneficiary

Eligible beneficiaries include living humans, charitable organizations recognized under the Internal Revenue Code, and qualifying non-profit entities. For-profit businesses and pet trusts do not qualify. A person named in both a POD account and a formal trust at the same bank counts only once per trust owner. An owner cannot also be a beneficiary of their own trust for insurance purposes.⁶

Certain Retirement Accounts

Self-directed retirement deposits form their own category, separate from single or joint accounts. All qualifying retirement deposits at one bank are combined and insured up to $250,000 total.⁷

Qualifying accounts include Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs, self-directed 401(k) plans, self-directed Keogh plans, and Section 457 deferred compensation plans. The defining feature is “self-directed”: the account holder chooses the investments. Employer-directed plans belong in the employee benefit plan category instead.⁷

One common misconception: naming multiple beneficiaries on an IRA does not add coverage. A person with a $150,000 Traditional IRA and a $130,000 Roth IRA CD at the same bank holds $280,000 in this category, and $30,000 is uninsured regardless of how many beneficiaries appear on the paperwork.⁷ Trust accounts work differently; retirement accounts do not.

Business, Partnership, and Association Accounts

Deposits owned by a corporation, partnership, or unincorporated association are insured up to $250,000 per entity, separate from the personal accounts of its owners, officers, or members.⁸ The number of owners does not raise the limit. A three-person LLC gets $250,000, not $750,000.

The entity must be engaged in an “independent activity,” meaning it operates for a legitimate business purpose rather than simply to expand deposit coverage. If the FDIC decides an entity exists only to inflate coverage, its deposits are attributed to the individual owners’ accounts.⁸ Unincorporated associations have an additional requirement: they must exist for a religious, educational, charitable, social, or other noncommercial purpose.⁹

Employee Benefit Plan Accounts

Employee benefit plan deposits receive “pass-through” coverage: insurance passes through the plan to each participant, and each participant’s non-contingent interest is insured up to $250,000.⁹ A pension plan holding $2 million in CDs at one bank can be fully insured as long as no individual participant’s share exceeds the limit. This coverage sits apart from whatever personal accounts those same employees hold at the bank.

Government Accounts

Deposits made by federal, state, local, and tribal governments are insured up to $250,000 per official custodian. Additional coverage beyond that amount may be available depending on the specific government entity and any collateralization arrangements in place.¹⁰

What FDIC Insurance Does Not Cover

Ownership categories only matter for products the FDIC actually insures: checking accounts, savings accounts, money market deposit accounts, and CDs, including principal and interest accrued through the date a failure occurs.¹¹ Stocks, bonds, mutual funds, annuities, life insurance policies, crypto assets, and the contents of safe deposit boxes are excluded, even when sold through an insured bank. U.S. Treasury securities are also outside FDIC coverage, though they carry a separate federal guarantee.¹² If a bank employee steers you toward an investment product, that product almost certainly falls outside deposit insurance no matter how the account is titled.

Coverage After a Bank Merger

When one insured bank acquires another, deposits from each original institution keep their separate coverage limits for six months.⁹ If you held $250,000 in a single account at each bank before the merger, both remain fully insured for the grace period even though you now technically hold $500,000 at one institution.

CDs get slightly more favorable treatment. A CD maturing after the six-month window keeps its separate coverage through that maturity date. A CD maturing within the six months and renewed at the same amount and term keeps separate coverage until the first maturity after the window closes. Renewing on different terms ends separate coverage when the six months are up.⁹ If a merger pushes your balances over the single-bank limits, that six-month window is the time to move funds elsewhere.

1
FDIC.gov. Your Insured Deposits
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FDIC.gov. Deposit Insurance
3
FDIC. Financial Institution Employees Guide to Deposit Insurance – Single Accounts
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FDIC.gov. Financial Institution Employees Guide to Deposit Insurance – Joint Accounts
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FDIC. Death of an Account Owner
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FDIC.gov. Financial Institution Employees Guide to Deposit Insurance – Trust Accounts
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FDIC.gov. Financial Institution Employees Guide to Deposit Insurance – Certain Retirement Accounts
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FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts
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eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
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FDIC.gov. Deposit Insurance At A Glance
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FDIC.gov. Deposit Insurance
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FDIC.gov. Financial Products That Are Not Insured by the FDIC