Some of the rules that protect wealthy savers’ bank deposits just changed. Here’s what to know

Recently, the FDIC (Federal Deposit Insurance Corporation) has updated its insurance coverage policies for trust accounts, effective April 1.

These changes may affect individuals with substantial funds in trust accounts.

Under the new regulations, the insurance coverage for trust deposits owned by a single person is capped at $1.25 million per insured bank.

This means that if you have trust deposits exceeding $1.25 million at a single institution, the amount beyond that limit will not be insured by the FDIC.

Previously, revocable and irrevocable trusts were treated separately, but now they are merged into a single category.

This may lead to reduced FDIC coverage for individuals with significant funds in both types of trusts at the same bank.

Informal revocable trusts, commonly known as payable on death accounts, are also affected by the new rules.

Previously, these accounts needed to be titled with “payable on death” language to qualify for trust coverage limits.

This requirement has been removed, but banks are now required to keep records identifying the beneficiaries in order for such accounts to be considered informal trusts.

To ensure that your deposits are fully insured, it’s important to review your current trust account balances in relation to the FDIC coverage limits.

If you have more than $1.25 million in trust deposits, you may need to consider diversifying your funds across multiple insured banks or adjusting the ownership categories of your accounts.

It’s worth noting that FDIC insurance also applies to other account types such as single and joint accounts.

By maintaining a balance below the $250,000 coverage limit in each account ownership category, you can maximize the protection provided by the FDIC.