Increase Your FDIC Coverage – How?

Home Blog Increase Your FDIC Coverage – How?

Posted On: May 11, 2023 by Peoples Bank of Kankakee County in: Personal Finances

FDIC insurance is a significant benefit for all depositors that have funds at an FDIC-insured bank, such as Peoples Bank. The FDIC, which stands for Federal Deposit Insurance Corporation, is an independent agency of the United States government. Its purpose is to protect depositors of insured United States banks in the unlikely event of a bank failure. Since the FDIC began operation in 1934, no depositor has ever lost a penny of FDIC-insured deposits.

FDIC Insurance Basics

The FDIC can securely insure deposits by examining and supervising financial institutions for safety, soundness, and consumer protection. FDIC insurance covers depositors’ accounts at each insured bank, for each account ownership category, dollar for dollar, up to the insurance limit of $250,000. The exciting news is that you can increase this insured amount by using multiple ownership categories. Keep reading to learn how.

What The FDIC Does and Does Not Cover

FDIC insurance covers all types of funds deposited at an insured bank but does not cover investments, even if they are purchased at an insured bank.

FDIC Insurance covers:

Checking Accounts
Savings Accounts
Money Market Deposit Accounts
Time Deposits such as Certificates of Deposit
Cashier’s Checks
Money Orders
Negotiable Order of Withdrawal (NOW) Accounts

FDIC Insurance DOES NOT cover:

Stocks
Bonds
Annuities
Municipal Securities
Mutual Funds
Life Insurance Policies
Safe Deposit Boxes and their contents
US Treasury Bills, Notes, or Bonds

Maximize Your FDIC Coverage with Ownership Categories

While the $250,000 FDIC insurance limit is per depositor, per insured bank, the FDIC provides separate insurance coverage for funds depositors may have in different categories of legal ownership. This means that a simple way to maximize FDIC coverage is to open multiple accounts at the same bank in different ownership categories.

The ownership categories recognized by the FDIC are:

Single Accounts
Employee Benefit Accounts
Certain Retirement Accounts
Revocable Trust Accounts
Irrevocable Trust Accounts
Corporation, Partnership, or Unincorporated Association Accounts
Government Accounts

To understand what this means, it’s best to look at a simple example:

Let’s say you are married. You and your spouse each can open individual accounts at a single bank, resulting in each of you having up to $250,000 of FDIC insurance. Since you get $250,000 in coverage for each ownership category, this means you can also open a joint account, each having $250,000 insured in that account. Between your three accounts, you could have $1 million FDIC insured at one bank. Since IRAs and certain retirement accounts are also covered at $250,000 per owner, this married couple could increase their FDIC coverage further to $1.5 million at one bank.*

Frequently Asked Questions                                   

Q: How can I get deposit insurance?

A: Depositors don’t need to apply for or purchase FDIC deposit insurance. Coverage is automatic whenever a deposit account is opened at an FDIC-insured bank.

Q: How do I find out if a bank is FDIC insured?

A: You can ask a bank representative, look for the FDIC sign at your bank, or you can use the FDIC's BankFind tool. 

Q: What about my deposits at other insured banks??

A: The FDIC insures deposits that a person holds in one FDIC insured bank separately from their deposits in another separately chartered FDIC insured bank. Funds deposited in separate branches of the same insured bank are not separately insured, but separately chartered insured banks are.

The FDIC: Electronic Deposit Insurance Estimator (EDIE) can be a valuable resource to calculate your personal FDIC insurance coverage. As a local community bank, Peoples Bank remains safe, solid, and well capitalized. As our valued customer, you have access to our experienced team. We stand ready to assist you with any of your FDIC coverage questions. Call or stop by anytime!

*These deposit insurance coverage limits refer to the total of all deposits that account owners have at each FDIC-insured bank. The example above shows only the most common ownership categories that apply to individual and family deposits and assume that all FDIC requirements are met.

An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. We can cover your overdrafts in two different ways:

We have standard overdraft practices that are available after your account has been open for 30 days and as long as you maintain your account in good standing.
We also offer an overdraft protection plan, Overdraft Protection Sweep, a link to a savings account. It may be less expensive than our standard overdraft practices. To learn more, ask us about this plan.

This notice explains our standard overdraft practices.

What are the standard overdraft practices that come with my account?

After your account has been open for 30 days and as long as you maintain your account in good standing, we do authorize and pay overdrafts for the following types of transactions:

Checks and other transactions made using your checking account number
Automatic bill payments

We do not authorize and pay overdrafts for the following types of transactions unless you ask us to (see below):

ATM transactions
Everyday debit card transactions

We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction.

If we do not authorize and pay an overdraft, your transaction will be declined.

What fees will I be charged if Peoples Bank of Kankakee County pays my overdraft?

Under our standard overdraft practices:

We will charge you a fee of up to $30 each time we pay an overdraft.
The maximum daily overdraft fee per presentment or item paid using the Overdraft Reserve Program is $150.00 per day.
No per item handling fee will be charged on de minimis overdrafts. De minimis overdraft for this policy means transactions that overdraw your account by $30 or less.
There is an overdraft fee of $5 per day that will be charged beginning the 4th consecutive business day your account is overdrawn.

Nonsufficient funds (NSF) fees - if an item drafted by you (such as a check) or a transaction you set up (such as a preauthorized transfer) is presented for payment in an amount that is more than the amount of money in your account and we decide not to pay the item or transaction, you agree that we can charge you an NSF fee for returning the payment. Be aware that such an item or payment may be presented multiple times by the merchant or other payee until it is paid, and that we do not monitor or control the number of times a transaction is presented for payment. You agree that we may charge you an NSF fee each time a payment is presented if the amount of money in your account is not sufficient to cover the payment, regardless of the number of times the payment is presented.

PAYMENT ORDER OF ITEMS - The law permits us to pay items drawn on your account in any order (for purposes of this section "items" means checks, orders and electronic transactions). To assist you in handling your account with us, we are providing you with the following information regarding how we process those items. When processing checks and orders drawn on your account our policy is to pay lower numbered checks and orders in numerical sequence, but electronic transactions are paid first in the order received. The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented. There is no policy that is favorable in every instance. If the smallest items are paid first, you may have fewer NSF or overdraft fees, but the largest, and perhaps more important items (such as rent or mortgage payments) might not be paid. However, if the largest items are paid first, your most important items might be paid but it may increase the overdraft or NSF fees if funds are not available to pay all of the items. We think our policy attains a reasonable balance between minimizing additional costs to you and paying your more important items. We encourage you to make careful records and practice good account management. This will help you to avoid creating items without sufficient funds and incurring the resulting fees.

What if I want Peoples Bank of Kankakee County to authorize and pay overdrafts on my ATM and everyday debit card transactions?

If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions after your account has been open for 30 days, you may opt in.

You have an ongoing right to change this consent at any time. If your overdraft privilege has been revoked for any reason, the opt-in or opt-out selection may not apply. Please contact your nearest office for more information.

Alternate ways to Opt In/Out or make changes:

By Phone. Our Customer Care Representatives can be reached at 815-936-7600.
By Mail. Peoples Bank of Kankakee County, 333 E. Court Street, Kankakee, IL 60901
In Person. Please visit your local office and ask a representative to help you decide which plan is best for you.