26.2 Retirement, Business and Custodial Insurance; FDIC Signs

Certain Retirement Accounts (12 CFR § 330.14)

Deposits held in specific tax-advantaged retirement vehicles are recognized as a distinct ownership category:

• Covered Retirement Accounts: Traditional Individual Retirement Accounts (IRAs), Roth IRAs, Simplified Employee Pension (SEP) IRAs, Savings Incentive Match Plan for Employees (SIMPLE) IRAs, and self-directed Keogh plans.
• Separate $250,000 Insurance: All qualifying retirement accounts owned by the same individual at the same bank are aggregated and insured up to $250,000 in total. This coverage is completely separate from, and does not dilute, any single, joint, or trust accounts maintained by the individual at the bank.

Employee Benefit Plan Accounts (12 CFR § 330.14)

Deposits of defined contribution employee benefit plans (such as 401(k) plans and profit-sharing plans) provide pass-through insurance coverage up to $250,000 for each individual participant's non-contingent interest, provided the bank maintains records identifying the plan administrator and the plan administrator maintains ascertainable records of each participant’s noncontingent interest.

Business Accounts: Corporations, Partnerships & Associations (12 CFR § 330.11)

Deposits of an incorporated entity, commercial partnership, or unincorporated association are insured under a dedicated business ownership category:

• Independent Activity Test: The entity must be engaged in an "independent activity," meaning the entity is operated primarily for a legitimate commercial, non-profit, or civic purpose, and was not formed solely for the purpose of increasing deposit insurance coverage.
• Aggregation and Limits: All deposit accounts owned by the same legal entity at the same bank are aggregated and insured up to $250,000 in the aggregate. This coverage is completely separate from the personal deposit accounts of the corporation's officers, directors, partners, or equity shareholders.

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3. Pass-Through Deposit Insurance: Custodial, Agency & Sweep Accounts

Under 12 CFR § 330.5 and § 330.7, pass-through deposit insurance allows insurance coverage to flow through a nominal account holder (such as an agent, broker, fiduciary, or fintech custodian) directly to the underlying beneficial owners.

The Three Prerequisites for Pass-Through Coverage

To establish valid pass-through insurance, three mandatory conditions must be strictly satisfied:

1. Account Titling Mandate: The deposit account records of the insured depository institution must expressly disclose the fiduciary, agency, or custodial nature of the account (e.g., "Fintech Services Inc., as Custodian for the Benefit of (FBO) Its Users," or "ABC Escrow LLC, Client Trust Account").
2. Ascertainable Ownership Records: The specific identities and ownership interests of each underlying beneficial owner must be readily ascertainable from records maintained in the regular course of business by the bank, or by the deposit broker, custodian, or third-party agent.
3. Genuine Ownership Interest: The deposited funds must actually belong to the individual customers under governing state property and contract law, and cannot constitute general corporate assets, credit liabilities, or speculative investments of the intermediary.

Recordkeeping risk: Missing reliable ownership records can prevent pass-through coverage. Do not assume every commingled account or absence of daily records automatically fails; apply the actual titling, ownership and recordkeeping requirements. FDIC insurance protects insured deposits upon bank failure and does not insure the fintech’s own insolvency or fraud.

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4. FDIC Advertising & Signage Regulations (12 CFR Part 328)

Separate insured deposits from mutual funds, securities, insurance and other nondeposit products. Nondeposit products are not FDIC-insured, are not deposits and can lose value; a bank’s name or location does not convert them into deposits. False or misleading statements about coverage, including by nonbanks, remain prohibited.

The official physical sign belongs where deposits are usually and normally received. Deposit advertisements generally require the official advertising statement, subject to the rule’s exceptions. Verify placement and legibility rather than treating every use of a bank’s name as a deposit advertisement. Review third-party representations about the bank and coverage, and correct misleading claims through the bank’s controls.

The FDIC’s January 2026 final amendment set April 1, 2027 as the compliance date for the revised official digital and ATM signage requirements. It specifies the digital sign on the homepage, login page and first page of deposit-account opening, narrows nondeposit signage to appropriate nondeposit pages, and adjusts ATM display rules. These future implementation requirements must not be presented as having been mandatory since May 2025. Prepare an implementation inventory, assign owners and verify the effective and compliance dates separately.

FDIC January 2026 final rule.

5. Deposit Insurance Comparison Matrix

Coverage classifications before arithmetic

Joint-account signature evidence has specified alternatives and exceptions, including certain CDs and negotiable instruments. Equal withdrawal rights and natural-person ownership remain important. A qualifying nonprofit or charity beneficiary is not limited universally to Section 501(c)(3). Aggregate trust balances by owner across covered revocable and irrevocable arrangements, rather than granting a separate limit to each trust. A merger CD’s transitional coverage depends on its maturity and, if renewed within the six-month period, the renewal terms; not every renewal automatically extends separate insurance. Use the FDIC’s insurance determination tool for a concrete classification exercise and retain the assumptions.

FDIC deposit insurance guidance.