What To Do When FDIC-Insured Acct Exceeds $250K?

[24601NoMore]

Or even better..

Husband, POD wife w/1 beneficiary - $500K.

Wife, POD husband w/1 different beneficiary - $500K.

Husband and wife, JTWROS - $500K

Total: $1.5M. And that's before you start to add additional benes or get creative with different account types (taxable v. IRA v. trust) and other creative tricks.

ETA - don't have time to check at the moment so please don't take that you have to have different benes listed in the above scenario to get to $1M on the individually titled accounts..if someone has time plz run the calculator and check if they need to be different benes or can be the same..

 

[kaneohe]

If I remember right, that's expected - you lose one of the owners when there's a beneficiary. So, 2 owners with 1 beneficiary s/be $500K. Try adding a 2nd bene and you should get to $750K.

That's a novel explanation for the one beneficiary case. Problem is if I have 2 beneficiaries the NCUA says 1M.

 

[Badger]

I spoke with the branch manager of my CU to set up a CD ladder in our joint account. We have $1m to divide equally into 4 CDs and was told it they would be insured if a CD was in each of our names and the other 2 CDs would be in a trust for each of the 2 children. Is that the same as beneficiaries? Is there a downside?



Cheers!

 

[jazz4cash]

There’s also the CDARS program.
https://www.cdars.com/home/how-cdars-works

 

[kaneohe]

I spoke with the branch manager of my CU to set up a CD ladder in our joint account. We have $1m to divide equally into 4 CDs and was told it they would be insured if a CD was in each of our names and the other 2 CDs would be in a trust for each of the 2 children. Is that the same as beneficiaries? ................................



Cheers!

I believe so. If you use the edie calculator, when you pick the account type,
one option is POD/ITF..........payable on death/in trust for........and then you are asked to pick beneficiaries. More specifically (check w/ the manager):
you may want to have
1)POD: owner H/beneficiary W 250K
2)POD: owner W/beneficiary H 250K
3) POD: owners H/W; beneficiaries C1/C2
that way transfers are automatic w/o probate.

 

[Finance Dave]

I have a large position at FIDO in which I'm very conservatively invested and therefore sometimes have over $500k in my "CORE" account (FZDXX). This is in a retirement account so I am the owner with my wife as beneficiary. It seems to me this would have $500k of FDIC insurance....but FIDO's documentation mentions that they divide the account into multiple "program" banks (see below quote from their website). But I'm wondering if this is "automatic" or is this something I need to set up. Also, it says elsewhere that I can see my balance split into these "program banks" on FIDO.com...but I'm unable to find it. I'll call FIDO during normal business hours to get more info on this, but if anyone knows answers to these last two questions please respond.


"Fidelity's FDIC Insured Deposit Sweep Program details
In utilizing the Program, your uninvested cash balance is swept to a program bank where the deposit is eligible for FDIC insurance. If you have more than $245,000 in uninvested cash in your account, the Program maximizes your eligibility for FDIC insurance by systematically allocating this uninvested cash across multiple program banks. At a minimum, there are generally five banks available to accept customer deposits, making customers eligible for nearly $1,250,000 of FDIC insurance.2"

 

[audreyh1]

FZDXX is not the FDIC insured bank program, it’s a money market fund Fidelity Premium Class money market fund.

 

[Finance Dave]

FZDXX is not the FDIC insured bank program, it’s a money market fund Fidelity Premium Class money market fund.

Thanks Audrey,

Well ok then I'm even more confused...as they told me that my "core" account by default is SPAXX, which is also a Gov't MM fund...so I'm trying to understand what cash account they have that utilizes the program banks they mention. At the time I set things up, FZDXX was paying slightly more than SPAXX...which is why I transferred most of my funds there for short-term keeping.

 

[foxfirev5]

Thanks Audrey,

Well ok then I'm even more confused...as they told me that my "core" account by default is SPAXX, which is also a Gov't MM fund...so I'm trying to understand what cash account they have that utilizes the program banks they mention. At the time I set things up, FZDXX was paying slightly more than SPAXX...which is why I transferred most of my funds there for short-term keeping.

My FIDO holdings include both a brokerage account and a cash management account. (Two versions of a brokerage account) The brokerage sweep acct is SPAXX while the cash management account sweep is an FDIC insured core holding. At this time neither pays anything so I use the cash management account for cash.

 

[audreyh1]

Thanks Audrey,

Well ok then I'm even more confused...as they told me that my "core" account by default is SPAXX, which is also a Gov't MM fund...so I'm trying to understand what cash account they have that utilizes the program banks they mention. At the time I set things up, FZDXX was paying slightly more than SPAXX...which is why I transferred most of my funds there for short-term keeping.

You may be able to request that Fidelity change your core account to the FDIC insured bank option. It pays very little, but is the safest.

 

[Finance Dave]

ok, update.

I called FIDO and sure enough, they helped me to change my CORE account so that I now have the protection of the program I mentioned. It was easy once they showed me where to find the button. I had to log in separately on my wife's account to do hers even though I have it set up where I can see all balances in her account even when I'm logged into mine.

THanks to all for the input.