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Trust Accounts

There are cases where deposits/accounts may be held in trust. For example, a parent (the trustee) may establish a bank account at a member institution for his/her child (the beneficiary). In this case, the deposit is being held in another right and capacity for the purpose of calculating the insurable amount.

Illustration A: Calculation of DI Coverage on Trust Account

In a simple scenario, Joe establishes a trust account for his two sons, and also has two accounts with the same member institution.

Depositor Accounts Branch Amount Insured Comments
Joe Savings Main $15,000 Joe is the depositor on 3 accounts, including 1 trust account. He is the beneficial owner of 2 accounts.

Trust account balances are not combined with a trustee’s individual accounts, so to obtain the insurable/payout amount, deposits which are beneficially owned by Joe are added together and the loan balance deducted from the deposits to obtain the insurable/payout amount.

Deposits held on the trust account are insured separately, with each beneficiary’s interest being insured up to a maximum of $50,000 for a total coverage of $100,000.
Checking Bay $5,000
Loan Bay ($5,000)
Total $15,000 $15,000
Joe in trust for John/Mike Savings Main $200,000 $100,000
Grand Total $115,000

What is Deposit Insurance?

In simple terms, deposit insurance provides peace of mind in the unlikely event your bank should experience difficulty and be forced to close. Read on for details on the who and what of the coverage we provide.

Is Your Bank A Member?

Need to know if your bank is a member of the program, and that your funds are insured? Our up-to-date list of member banks will answer your questions.

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