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Question:

Can FDIC protection for certificates of deposit be purchased by a married couple (with four adult children) to cover $2 million?

Response:

Yes. This, of course, all of the sudden seems more relevant given the recent failures of Silicon Valley, Signature and First Republic Banks.

There are a number of ways to maximize the $250,000 FDIC insurance. It is provided per account, per owner. So, it’s possible to protect $1 million by having one account in your name, one in your spouse’s, and one in joint names. The accounts in each of your names would each receive $250,000 of insurance and you would each receive $250,000 of coverage for the account in joint names. You could do this again at another bank to receive the $2 million of protection. Or you could create additional accounts at the original bank in joint names with your children.

On the other hand, while the FDIC only protects $250,000 per account, it has stepped in and fully insured all the accounts in the failed banks. Only the stockholders lost their money.

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