Wife and I have two HYSA accounts at the same bank. One she contributes to, the other I contribute to, but we are both joint account holders of both. How does FDIC insurance work in this case? We are approaching the limit (250k) with our combined balances. Should one of us move out to another bank to ensure we don’t go over? Are we covered up to $500k provided we keep the balances of each below or at $250k?
It’s not per account it’s per bank, but you each get $250k for a total of $500 so you are ok in this situation
It’s per account?
Depending on the bank, but there’s really no down side of having another account at a different bank.
If you have two joint accounts, it doesn’t help you as category is same. Your FDIC coverage from all joint accounts is only $250k per person. Here is the scoop for FDIC insurance: This is per bank per category. Joint account is a separate category than individual account and same is the case with retirement account. In your case, here is what you can do with a single bank: - Individual account for each one of you. This will provide coverage of up-to $250k per account so you can have total $500k coverage. It doesn’t matter who funds it, it is based on the account owner. - You both can have a joint account that will cover up-to $500k. Again, doesn’t matter who funds it by how much, it will be considered owned by each one of you half and half. So total you can have a coverage of up-to 1 million with single bank by two of you by having one joint and two individual accounts. Example, you have individual account with $200k, your spouse has $300k and you both have a joint account with $400k in it. All this is with one bank. So your FDIC insurance coverage is $200k for your individual account, $250k for your spouse individual account, $200k each because of joint account. If you have more money than you can transfer money to more banks. Please refer to FDIC website that will also have more examples. There are defined categories other than joint and individual accounts. You get separate coverage by account categories. https://www.fdic.gov/resources/deposit-insurance/faq/#:~:text=The%20standard%20deposit%20insurance%20coverage,held%20at%20the%20same%20bank.
Each individual is insured to $250k.
You get $250k each, per insured bank, generally. You can stretch this by having one individual account each and one joint account for a total of $1m coverage at a single bank. Once you approach or cross $1m cash though, the bank will help you with better products, like auto sweeps or just getting it properly invested. Any reputable bank will reach out if you start routinely storing enough cash with them to exceed FDIC limits, you will start getting private client info.
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Joint accounts are insured up to 500k. If you add a beneficiary to another account, you can get insured up to 750k in one bank. Marcus has a whole doc section about it, google it up.