Ask Terry Questions Bank Insured Deposits

Bank Insured Deposits

By Terry Savage on December 26, 2023 | Financial Planning / Retirement

Hi Terry,
I am planning to open IRAs at a bank where deposits are FDIC insured for up to 250k. I am planning to open multiple IRAs that will total 700k. I have a revocable trust with four people named as beneficiaries. The banker said my 700k deposit would be insured because the FDIC would insure 250k for each of my four beneficiaries. Is this true? Thank you.

Terry Says

NO, this is absolutely FALSE!! Your “banker” is misinformed!
Here’s quote from the FDIC website:
“All certain retirement accounts owned by the same person at the same IDI are aggregated and the total is insured up to $250,000. Listing beneficiaries on IRAs, while valid to designate the transfer of funds when the owner dies, does not increase deposit insurance coverage.”
The Italics are mine.

First of all, why are you putting all your IRAs in CDs? How much do you have in your IRA account? It should have one or two named beneficiaries — max. They can be co-beneficiaries, or contingent beneficiaries (the second if the first should die).
If you have more than $250,000 and want CDs, move to a different bank.

Or separate the IRA money into four accounts, naming a beneficiary for each one — and either move to a different institution, or ROLL them directly into four separate accounts at Fidelity or Vanguard, each with its own beneficiary, each invested in a government-only money market fund.

IMPORTANT, if you have a revocable living trust, then the Trust is owner of any non-IRA account — and if you die, the Trust will distribute to your beneficiaries per your instructions. A trust account does not name beneficiaries.

It sounds to me like you’re getting some bad advice on all counts — safety, investments, and estate planning. Maybe consider a meeting with a fee-only FIDUCIARY financial planner you can trust to give you good overall advice? Finde one at

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