FDIC Rules

I've been asked today what are the rules governing FDIC deposits. With today's news on the failure of the bailout bill, it's a smart practice for businesses, nonprofits and individuals to take a look at their bank accounts. The FDIC has a handy calculator called "Edie" that you can enter all of your bank account information and it will tell you whether you are covered or not.

If entering your information online makes you nervous, a couple of rules to remember for business FDIC coverage:

  • FDIC offers coverage of $100,000 per person, per entity
  • LLC's and Corporations are separate entities
  • A sole-proprietorship is not a separate entity so business accounts and personal accounts are added together and only insured to $100,000
  • A corporation or LLC with several accounts at the same bank is only insured to the $100,000 on all the accounts together.

This information is by no means comprehensive. I am not an attorney or accountant. I just wanted to give some preliminary guidance. If your organization has close to $100,000 in combined deposits at a bank it's wise to consult your accountant and consider opening up another account at a different bank.


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