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Expanding FDIC Insurance Coverage

These days, many people are concerned about making sure that their bank deposits are fully insured.

Rest assured, the accounts of Presidential Bank depositors are fully insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum amount provided by law, which under current law is $250,000 for each separately insurable depositor.

At Presidential, we are glad to help our customers maximize their FDIC insurance coverage. Here’s how:


Maximize Family Coverage

Each member of a family may open a deposit account that will receive separate FDIC insurance coverage up to $250,000. Individuals who have their own account can also have a joint account with another family member or any other person, which would have its own separate FDIC insurance coverage up to $250,000.


Thus, for example, a husband and wife can, together, easily obtain FDIC insurance coverage of up to $750,000, by each spouse having a separate individual account, while also opening a joint account in the names of both spouses. Each of these 3 different accounts would have separate FDIC insurance coverage up to a maximum of $250,000, for total maximum coverage of $750,000.


Moreover, joint accounts are not limited to spouses. They can be held jointly with children, relatives or any other person. Therefore, when accounts for children are included, for example, the available deposit insurance can be increased by $250,000 for each child’s account, plus another $250,000 for each joint account that the family may wish to create, so long as the new joint accounts do not have exactly the same ownership as any of the other family accounts.


It must be understood, however, that different accounts held by the same individual or the same joint owners are aggregated together for purposes of the $250,000 FDIC insurance coverage limit. Thus, if a person has 2 different deposit accounts, each in his or her own name, and they both have a $250,000 balance, then $250,000 will remain uninsured.


Obtain FDIC Insurance Coverage up to $5,000,000 through the Presidential Bank Network

To obtain more FDIC insurance coverage, Presidential Bank participates in a network of banks whereby we can obtain full FDIC insurance coverage for deposits in amounts of up to $5 million, seamlessly, without extra cost, for our customers. Rates and other terms of these accounts are the same as the terms of our Money Market Advantage accounts, except for the procedures to obtain additional FDIC insurance.


The way it works is that our customer sends us the full amount for which they are seeking 100% FDIC insurance coverage, say $5 million. After obtaining a signed agreement with the customer, we can then deposit that full amount into the customer’s Presidential account, but through a computer network we immediately exchange electronically the excess over $250,000 that we received from our customer with a like amount of money from the other participating banks that are also members of the same network. Thus, we keep an amount of money exactly equal to our customer’s full deposit, but our customer’s deposit is deemed to be held across a group of banks in the network, so that each bank is not responsible for more than $250,000.


The records maintained for the other participating banks will show that the excess of our customer’s deposit exceeding $250,000 is actually deemed to be held as separate deposits at those other banks, limited of course to $250,000 at each other bank, so for FDIC insurance purposes our customer’s deposit is deemed to be held among a group of banks with each bank holding not more than $250,000. Meanwhile our records will show that the same amount of money as was represented by the excess of our customer’s deposit with us is actually accounted for as separate deposits received from customers of the other banks in the network.


Because our customers’ money going to other banks in the network is the exact same amount as we receive from other banks in the network, no money initially moves between the network banks. The individual accounts at the different banks that make up our customer’s total deposit are merely electronic book entries. Our customer can use his or her account at Presidential as if it were a single account containing the full amount of the deposit, and behind the scenes, transactions will be automatically processed among the banks in the network so that full deposit insurance is always maintained, but the depositor’s funds are always available for withdrawal through Presidential Bank, under the agreed terms of the applicable Presidential account.


Presidential customers who participate in this program will receive access through our website to online information indicating at all times exactly which banks are holding their separate insured deposit account balances; this information will also be provided to customers in periodic statements. In addition, customers in the program will be able to identify specific banks that they wish to exclude from the program, in order to be assured that their separate account balances under the program are not held at banks where they already have deposits or that they wish to exclude for other reasons.


This is all perfectly legal and it is actually encouraged by the FDIC to better protect depositor funds. The type of “deposit placement network” used by Presidential, as a “network member bank,” to implement this program is explicitly recognized under federal law (the applicable citation is 12 U.S. Code § 1831f(i)(2)(C) and (D)).


The foregoing information is intended to provide a general overview of our deposit placement network program for expanded FDIC deposit insurance coverage; however, it is subject in its entirely to such written agreements as depositors may execute in connection with their participation in the program.


FDIC Insurance Coverage in General

Presidential is federally insured through the Federal Deposit Insurance Corporation - FDIC, an independent agency of the United States government. FDIC coverage applies to any person who has deposits at an FDIC insured bank. FDIC insurance covers up to $250,000 per depositor per ownership category. Ownership category refers to the type of account. The FDIC defines the ownership categories as:

  • Single accounts
  • Certain retirement accounts
  • Joint accounts
  • Revocable trust accounts
  • Irrevocable trust accounts
  • Employee benefit plans
  • Corporation / partnership / unincorporated association accounts
  • Government accounts

With deposit accounts held by more than one person, for example a joint account shared by spouses, each depositor is insured up to $250,000 for that ownership category.


Additional Information

If you have questions about your coverage, or would like to learn more about FDIC insurance and how it works, we encourage you to access the following resources:


If you have any additional questions, call our Customer Service Center – 800-383-6266 or 240-333-9059, Monday – Friday, 8am – 10 pm Eastern Time.

Last Modifications: 3/21/2023 3:32:43 PM