FDIC coverage for POD and trust accounts
Adding beneficiaries to a bank account can raise its insurance coverage well above $250,000. Here is how the FDIC's trust-account rule works, with examples.
The FDIC's standard coverage is $250,000 per depositor, per insured bank, per ownership category. One of those categories — trust accounts — works differently from the rest: coverage is multiplied by the number of beneficiaries. That makes it the category most people use, often without realizing it, when a single bank holds more than $250,000 of their money.
What counts as a trust account
Since April 1, 2024, the FDIC has insured revocable and irrevocable trust deposits under a single "trust accounts" category. It includes:
- Informal revocable trusts — ordinary checking, savings, money market or CD accounts with a payable-on-death (POD), in-trust-for (ITF) or Totten trust designation. The beneficiaries must be identified in the bank's account records.
- Formal revocable trusts — deposits titled in the name of a living trust.
- Irrevocable trusts — deposits held by an irrevocable trust (with some exceptions, such as trusts where an insured bank is the trustee, which have their own rules).
All of an owner's trust deposits at the same bank — POD accounts, living-trust accounts and irrevocable-trust accounts — are added together and measured against that owner's single cap.
Who counts as an eligible beneficiary
- Living people (including your spouse or a child).
- Charities and other nonprofit organizations recognized by the IRS.
Beneficiaries are counted when they are entitled to the deposits on the owner's death. A beneficiary who would receive funds only if someone else dies first (a contingent beneficiary) generally doesn't add coverage. Each unique beneficiary counts once per owner, no matter how many accounts name them.
Worked examples
| Setup at one bank | Maximum trust-category coverage |
|---|---|
| One owner, POD to one child | 1 × 1 × $250,000 = $250,000 |
| One owner, POD to spouse and two children | 1 × 3 × $250,000 = $750,000 |
| Joint owners, POD to two children | 2 × 2 × $250,000 = $1,000,000 |
| One owner, living trust naming six beneficiaries | Capped at 5 × $250,000 = $1,250,000 |
| Joint owners, five or more beneficiaries | 2 × $1,250,000 = $2,500,000 |
These amounts are in addition to the owner's single-account, joint-account and retirement-account coverage at the same bank, because those are separate ownership categories. Example: a person with $250,000 in an individual account and $500,000 in an individual account with POD to two children could be fully covered at one bank — $250,000 in the single category and $500,000 in the trust category.
Common misunderstandings
"Adding a beneficiary to my IRA increases coverage"
No. IRA deposits are in the "certain retirement accounts" category, insured to $250,000 per owner regardless of how many beneficiaries are named.
"Each POD account gets its own $250,000"
No. All trust accounts for the same owner at the same bank are combined. Opening a second POD account naming the same beneficiaries doesn't add coverage.
"A joint account with beneficiaries is still a joint account for insurance"
When a joint account names POD beneficiaries in the bank's records, it is insured in the trust category, calculated separately for each co-owner. A joint account with two owners and two POD beneficiaries works the same way as the "joint owners, POD to two children" row above.
"Different branches give separate coverage"
No. Coverage is per insured bank (per charter). Branches of one bank share one set of limits.
When an owner dies
FDIC rules provide a six-month grace period after the death of an account owner, during which the deposits are insured as if the owner were still alive, so a family has time to restructure accounts. After that, coverage is recalculated based on the new ownership.
How to confirm your coverage
- Check that the bank's records list every beneficiary by name. Ask for confirmation in writing if you're relying on POD coverage for large balances.
- Run your accounts through the FDIC's EDIE estimator, which applies the current rules.
- Recheck after marriages, divorces, births, deaths or large deposits.
Credit unions: the NCUA has adopted the same per-beneficiary structure for share insurance, effective December 1, 2026. See FDIC vs NCUA insurance.
Frequently asked questions
How much FDIC insurance does a POD account have?
A payable-on-death account is insured in the trust category at $250,000 per owner for each eligible beneficiary, counting up to five beneficiaries — a maximum of $1,250,000 per owner per bank across all of that owner's trust accounts.
Does a single-owner account with POD to a spouse and two children get $1,000,000 of coverage?
No. One owner with three eligible beneficiaries is insured up to $750,000 in the trust category (1 × 3 × $250,000). It would take four eligible beneficiaries to reach $1,000,000, or two owners and two beneficiaries.
Is a joint account with two POD beneficiaries the same as a joint account with beneficiaries listed?
For FDIC purposes, yes, as long as the beneficiaries are named in the bank's account records. Either way the deposits are insured in the trust category, calculated separately for each owner.
When did the FDIC trust account rules change?
April 1, 2024. Revocable and irrevocable trust deposits were merged into one trust-accounts category with a single formula and a $1,250,000 per-owner cap at each bank.
Do IRA beneficiaries increase FDIC coverage?
No. IRAs are insured in the certain retirement accounts category at $250,000 per owner, regardless of beneficiaries.