Maximizing Your FDIC Insurance

As a depositor at The Commerce Bank of Washington, we want you to know how your deposits are insured and how you can increase your amount of insurance protection.

Accounts Covered by FDIC Insurance for up to $250,000

By law, the maximum amount of Federal Deposit Insurance Corporation (FDIC) coverage on accounts is $250,000 for each depositor at each insured depository institution and for each account ownership category.

Special Rule for Sweep Investments

If you have a checking account that “sweeps” funds into another account, then funds swept into FDIC insured accounts will be subject to the $250,000 FDIC insurance limit. Funds swept into accounts that are not FDIC insured will not have any insurance.

How to Increase the Amount of Your FDIC Insurance at The Commerce Bank of Washington Beyond $250,000

As a depositor in The Commerce Bank of Washington, you should know how your deposits are insured, and how the amount of insurance protection can be increased beyond $250,000 through a combination of accounts. The following questions and answers provide you with information you need to make informed decisions regarding your deposits. For more information, we encourage you to use the FDIC Federal Deposit Insurance Estimator, available online at www.FDIC.gov/edie.

Q: What is the basic amount of FDIC insured protection for each depositor?

A: The basic insured amount for each depositor is $250,000. The FDIC insurance protection is extended to deposits at The Commerce Bank of Washington, including savings, checking, NOW accounts, cashiers checks, official checks, pension accounts, letters of credit, certificates of deposit, money orders, and IRA accounts.

Q: How can I increase the amount of my FDIC insurance at The Commerce Bank of Washington beyond $250,000?

A: If your combined account balances exceed $250,000, there are several quick and easy ways to increase or maximize your insurance coverage. Deposits maintained in different categories of legal ownership are separately insured. So you can have more than $250,000 insurance coverage in a single institution through a combination of different categories of ownership. The most common categories of ownership are single (or individual) ownership, joint ownership, and testamentary accounts.

In addition to the FDIC insurance on your other deposits, each depositor is also separately insured up to $250,000 for funds held for retirement purposes (i.e. Individual Retirement Accounts).

You cannot increase FDIC insurance by dividing funds owned in the same ownership category among different accounts. The type of account - whether checking, savings, certificate of deposit, or an outstanding official check such as a cashier's check, or other form of deposit - has no bearing on the amount of insurance coverage. Furthermore, the use of Social Security numbers or taxpayer identification numbers does not determine insurance coverage.

EXAMPLES

#1 $2,000,000 FDIC-Insured Deposits for a Married Couple
Husband's Individual Account $250,000
Wife's Individual Account $250,000
Husband and Wife Joint Account $500,000
Husband's IRA $250,000
Wife's IRA $250,000
Husband Payable on Death to Wife* $250,000
Wife Payable on Death to Husband* $250,000
 
#2 $3,500,000 FDIC Insured Deposits for a Family or Group of Four
Husband's Individual Account $250,000
Wife's Individual Account $250,000
Husband and Wife Joint Account $500,000
1st Child's Aggregate Joint Account Funds $250,000
2nd Child's Aggregate Joint Account Funds $250,000
Husband's IRA $250,000
Wife's IRA $250,000
Husband Payable on Death to Wife* $250,000
Wife Payable on Death to Husband* $250,000
Husband Payable on Death to 1st Child* $250,000
Husband Payable on Death to 2nd Child* $250,000
Wife Payable on Death to 1st Child* $250,000
Wife Payable on Death to 2nd Child* $250,000

Q: How is FDIC insurance calculated for my family living trust?

A: Accounts in the name of a living trust, also referred to as totten, testamentary, payable on death, or revocable trusts, are insured separately from any individual or jointly-owned funds of the owner(s). For the purposes of FDIC insurance coverage, a beneficiary is defined as a natural person, a charitable organization, or a non-profit entity properly organized under IRS code. Each owner is insured to $250,000 for each entitled beneficiary. Take a look at the following example:

The Family Trust
Trustors: Husband and Wife
Beneficiaries: Their two children
Husband in trust for 1st Child* $250,000
Husband in trust for 2nd Child* $250,000
Wife in trust for 1st Child* $250,000
Wife in trust for 2nd Child* $250,000

NOTE: This trust states that the beneficiaries' share will pass to the beneficiaries' children if the beneficiary dies before the trustor(s). These grandchildren are not entitled to any trust assets or insurance coverage while their parent is alive.

For more information about the FDIC, please visit their website at www.FDIC.gov. To understand how to maximize your own FDIC coverage, you can speak to a helpful representative at The Commerce Bank of Washington by calling (206) 292-3900.

* These illustrations also apply to other beneficiaries.
A beneficiary is defined as a natural person, a charitable organization, or a non-profit entity properly organized under IRS code.
For other qualifying combination accounts, check with a bank representative, or ask for the FDIC brochure, "Insuring Your Money."

© 2008 - 2014 The Commerce Bank of Washington, N.A.