FDIC Apply to Beneficiaries for CD Account?

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Question:

For a CD account with two owners and three beneficiaries, would FDIC insurance apply only to the co-owners? Or would the FDIC insurance also apply to the beneficiaries as it does in a revocable trust?

Answer:

If the account is a Totten Trust account or designated as POD (Pay on death) to the named beneficiaries, it is insured under the FDIC's revocable trust rules at 12 CFR Part 330, section 330.10. Each owner of the account is insured separately from his/her individually or jointly-held accounts, in an amount equal to the total number of different beneficiaries named in the account(s) multiplied by the current SMDIA ($250,000). The beneficiaries would have to be natural persons or charitable organizations and other non-profit entities recognized as such under the Internal Revenue Code of 1986, as amended.

First published on BankersOnline.com 3/11/13