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FDIC - Insuring Your Deposits

Merchants State Bank is an FDIC-insured bank and we want to answer any questions or concerns you may have regarding your deposits! Please feel free to contact your local branch with any questions.

What is the FDIC?

The FDIC - short for the Federal Deposit Insurance Corporation - is an independent agency of the United States government. The FDIC protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. The term insured bank is used to mean any bank or savings association with FDIC insurance.

Why is FDIC insurance important to you?

All FDIC-insured banks must meet high standards for financial strength and stability. The FDIC, with other federal and state regulatory agencies, regularly reviews the operations of insured banks to ensure these standards are met. Even with these safeguards, some insured banks fail. If your insured bank fails, FDIC insurance will cover your deposits, dollar for dollar, including principal and any accrued interest, up to the insurance limit.

What does the FDIC Insure?

The FDIC insures all deposits at insured banks, including checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs), up to the insurance limit.

The FDIC does not insure the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank.

Basic Insurance Amount is $250,000

The basic insurance amount is $250,000 per depositor per insured bank.

If you and your family have $250,000 or less in all your deposit accounts at the same insured bank, you do not need to worry about your insurance coverage - your deposits are fully insured!

Coverage over $250,000

The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership. You may qualify for more than $250,000 in coverage at one insured bank if you own deposit accounts in different ownership categories.

EDIE can be used to calculate the insurance coverage of all types of deposit accounts offered by an FDIC-insured bank, including:

  • Checking Accounts
  • Savings Accounts (both statement and passbook)
  • Money Market Deposit Accounts (MMDAs)
  • Certificates of Deposit

Calculate your insurance coverage using the FDIC's online Electronic Deposit Insurance Estimator at

Common Ownership Categories

The most common ownership categories are:

  • Single Accounts
  • Certain Retirement Accounts
  • Joint Accounts
  • Revocable Trust Accounts

These are deposit accounts owned by one person and titled in that person's name only. All of your single accounts at the same insured bank are added together and the total is insured up to $250,000.

Certain Retirement Accounts

These are deposit accounts owned by one person and titled in the name of that person's retirement plan. Only the following types of retirement plans are insured in this ownership category:

  • Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive March Plans for Employees (SIMPLE) IRAs
  • Section 457 deferred compensation plan accounts
  • Self-directed defined contribution plan accounts
  • Self-directed Keogh plan accounts
  • All deposits that an individual has in any of the types of retirement plans listed above at the same insured bank are added together and the total is insured up to $250,000.

Naming beneficiaries on a retirement account does not increase deposit insurance coverage.

Joint Accounts

These are deposit accounts owned by two or more people. If both owners have equal rights to withdrawn money from a joint account, each person's shares of all joint accounts at the same insured bank are added together and the total is insured up to $250,000.

If a couple has a joint checking account and a joint savings account at the same insured bank, each co-owner's shares of the two accounts are added together and insured up to $250,000, providing up to $500,000 in coverage for the couple's joint accounts.

Jointly owned qualifying trust accounts are not included in this ownership category.

Revocable Trust Accounts

These are deposits held in either payable-on-death (POD) accounts or living trust accounts.

Payable-on-death (POD) accounts
also known as testamentary or Totten Trust accounts - are the most common form of revocable trust deposits. These informal revocable trusts are created when the account owner signs an agreement - usually part of the bank's signature card - stating that the deposits will be payable to one or more named beneficiaries upon the owner's death.
Living trusts - or family trusts
are formal revocable trusts created for estate planning purposes. The owner of a living trust controls the deposits in the trust during his/her lifetime.

Determining coverage for living trust accounts can be complicated and requires more detailed information about the FDIC's insurance rules than can be provided here. If you have a living trust account, contact Merchants State Bank or the FDIC for more information.

For more information from the FDIC

Call toll-free at 1-877-ASK-FDIC (1-877-275-3342) from 7am until 7pm (Central Time) Monday through Friday or review the content on the website.

Calculate your insurance coverage using the FDIC's online Electronic Deposit Insurance Estimator at

Stop in at any of our locations and we will happily walk you through the process and give you a print-out of your FDIC insurance coverage.

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