Deposit Insurance Scenarios

Let’s look at some scenarios and see what adding joint owners and beneficiaries will do for the combined NCUA and ESI coverage limits.

Scenario 1:

Tom is the sole owner on several deposit accounts with a total balance in excess of the combined NCUA and ESI coverage limit of $500,000.

He adds his son Jack as a joint owner on all of his accounts, and now, because both owners are entitled to $250,000 each of insurance coverage from the NCUA and an additional $250,000 from ESI, the combined balance is insured for up to $1,000,000.

Scenario 2:

Buck and Sally are joint owners on multiple deposit accounts that total $300,000. Like Tom and Jack in Scenario 1, their accounts are insured for up to $500,000 by the NCUA and an additional $500,000 from ESI. 

However, Sally just learned that she has inherited $1.2 million, and she and Buck want to make sure their deposits will be fully insured.

If they put $1,200,000 into their jointly owned deposit accounts, bringing their total to $1,500,000, they will have maxed out the NCUA and ESI coverage on those accounts at $1,000,000, leaving $500,000 uninsured.

They have four kids, so they open an additional joint account with the $500,000 that is uninsured and name their children as beneficiaries, meaning the new account is covered for up to $2,000,000 ($250,000 for each of the four beneficiaries per joint owner) through the NCUA and an additional $2,000,000 from ESI.