Is Your Money Safe?

At The Welch Group, we’re keenly focused on helping individuals and families accumulate and preserve wealth. Our integrated service model is uniquely designed to manage all aspects of your wealth.

 The last real banking crisis was in 1987 when hundreds of banks failed amid a commercial real estate collapse.  That credit debacle peaked in 1989 with 534 bank failures in that year alone.  Comptroller of the Currency, John C. Duncan, who oversees approximately 1700 national banks, expects bank failures to return to historical norms after a multi-year period in which no institution his agency oversees has failed.  Currently, approximately 75 institutions are on the problem bank list at the Federal Deposit Insurance Corporation (FDIC).


All of this suggests that this is a good time to revisit your bank investments and the rules protecting your money held in banks backed by the FDIC.  In general, FDIC covers your money held in a single bank up to $100,000.  Under certain circumstances, you can have multiple accounts exceeding $100,000 fully insured at the same bank.  Here is a brief look at the rules:


Individual accounts.  All accounts in your name at the same insured bank are added together and insured for up to $100,000.


Joint accounts.  Joint accounts are insured separately from individual accounts.  Your share of all joint accounts in the same bank where you are a joint owner are added together and insured for up to $100,000.  For example, you have a joint account with your spouse for $150,000 and a joint account with your daughter for $60,000.  Your share of both joint accounts totals $105,000.  $100,000 is covered by FDIC insurance and $5,000 is not covered. Any co-owners with you are also insured for up to $100,000 under these same rules.


Payable-on-death (POD) accounts.  POD accounts, sometimes referred to as testamentary or Totten trust accounts, are a form of revocable trust whereby the account owner names a beneficiary or group of beneficiaries who will receive the funds upon the death of the owner.  For POD accounts, all qualifying beneficiaries (direct family members) are each insured up to $100,000.  For example, you have a $550,000 account under a POD agreement with your three children as beneficiaries; your account would be insured for $300,000.  $250,000 would not be insured.  However, if you and your spouse were joint owners of this same account, the account would be insured up to $600,000; $100,000 per beneficiary for each account owner.


Retirement accounts.  Certain retirement accounts, including IRAs, Simplified Employee Pension Plans (SEPs), SIMPLE IRAs, Section 457 deferred compensation plans, self-directed Keogh plans and self-directed defined contribution plans are insured up to $250,000.  In these cases, all plans in a single depositor’s name are added together for purposes of meeting the insurance limit. 


You’ll want to make certain that your bank or savings association is a member of the FDIC, which is an independent agency of the federal government.  To check out your bank or for more information on FDIC insurance, go to and click on ‘Deposit Insurance’.  


Assuming you have decided that you need to spread your money across multiple banks, how do you go about finding the best rates?  For a sampling of the best rates for certificates of deposits or money market accounts in FDIC insured banks, go to the Resource Center at and click on ‘Best CD Rates’.  Use these top rates to compare to your favorite local bank CD rates.  If the national rates are higher, use this information to negotiate an equal or better rate at your local bank.  If they fail to match the rate, you can invest in the out of state bank, typically, through an online application. 


If you would like to be a hero to a friend or family member that you know or suspect has significant funds held at the bank, give them a copy of this article.  They will appreciate your thoughtfulness and you might just save their retirement!