Question: I am confused by the rules for FDIC insurance. I thought the limit for coverage was $250,000, but my friend says CDs owned by my trust can be insured for a lot more. Who is correct?
Answer: Thanks for your question. The good news is you are both right, but many people don’t realize that bank deposits made by revocable trusts get special treatment by the FDIC. Let me see if I can clear up some of the confusion.
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that protects depositors in United States banks. If you deposit money in an insured bank and that bank fails, the FDIC guarantees you get your money back, up to a certain limit.