FDIC Insurance on a CD
If I am the only owner of a $300,000 FDIC insured CD with three beneficiaries and the bank closes would I get the full $300,000? The bank told me I have $1,000,000 of insurance because of the three beneficiaries who each have $250,000 insurance so I shouldn’t worry. I don’t believe this. Please help me understand this because I would get $250,000 but who gets the other $50,000? I love listening to you on WGN Radio.
Terry Says
I have no idea why you would want to leave $300,000 in a CD at any bank.
Here — read the rules for FDIC insurance: https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/index.html
Specifically the rules say: A deposit owner’s trust deposits will be insured in an amount up to $250,000 for each of the trust
beneficiaries, not to exceed five, regard less of whether a trust is revocable or irrevocable, and
regardless of contingencies or the allocation of funds among the beneficiaries.
But if something happens to the bank, it could take a while for them to figure it out — and your trust must be created correctly.
Why not just buy Treasury Bills direct from the government — No limitation on the amount you can purchase — and they have the highest degree of safety. Read this: https://www.terrysavage.com/t-bills-beat-cds/
