Question: We were discussing the FDIC insurance coverage on a church's accounts and the best information that I have from FDIC per brochure and Web site is that a church's deposits (checking, savings, Money Market, and CD) would be combined and protected up to $100,000. Someone else at the bank disagreed with this position and thought you might be able to help explain our coverage.
Answer: Deposits are insured by FDIC according to the rights and capacities in which they are held. Regardless of whether it is an association or a corporation, the deposits of a church would be considered one "right and capacity". As one right and capacity, the deposits of the church held in one depositary institution would be added together and insured in the aggregate up to a maximum of $100,000. If the church has some separately incorporated subsidiaries the subsidiaries could qualify for separate coverage.
One thing bankers should remind their customers of is the fact that deposit insurance is irrelevant except in the event the bank should fail. If your bank is a strong, healthy, sound financial institution, it's unlikely the deposit insurance limits will come into play. Customers should take this into consideration when choosing a financial institution.
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