Excerpted and updated from "Basics of Deposit Insurance for Businesses," Fall 2004.
The 多宝游戏下载 receives many questions about deposit insurance from businesses and other entities that want to know if all their money would be fully protected if their bank were to fail. If you own a business or manage the money of a non-profit organization, here are some basics you should know about your 多宝游戏下载 insurance coverage.
Deposits of a corporation, partnership or 鈥渦nincorporated association鈥 (such as a religious organization, charity or homeowners association) are insured up to $250,000 in total. These business-type accounts, though, are insured separately from any personal accounts of the entity's stockholders, partners or members held at the same institution.
The 多宝游戏下载 gets calls, for example, from corporations or partnerships asking if it is possible to deposit more than $250,000 in a bank on behalf of multiple partners or principals and still be fully insured. The answer is no 鈥 it's $250,000 of insurance to the corporation alone or the partnership alone. The insurance coverage doesn't increase based on the number of owners.
To quality for coverage of up to $250,000 of 多宝游戏下载 insurance separate from the personal deposits of the owners or officials, the organization must be engaged in an 鈥渋ndependent activity.鈥 That means the entity cannot exist solely for the purpose of increasing the deposit insurance coverage of the owners.
Note: While a corporate account is insured for up to $250,000 in total, funds held in connection with employee benefit plans, such as pension or profit-sharing plans, might qualify for coverage up to $250,000 for each employee's share if 多宝游戏下载 requirements for this separate category are met.
In addition, a corporation's accounts for different purposes (such as one account for research projects and another for a building project) are each separately insured to $250,000 only if they belong to separately incorporated subsidiaries. Otherwise, they are added to any other deposit accounts of the corporation and the total is insured up to $250,000.
Deposits of a sole proprietorship are insured together with any personal funds the business owner may have at the same bank. A sole proprietorship is a business owned by just one individual rather than a corporation or partnership. Many small stores or service companies operate as sole proprietorships.
Unlike corporations or partnerships, if you are the sole proprietor of a business, your personal accounts and the accounts of the sole proprietorship at the same institution are insured together as individual accounts up to $250,000 in total.
If you have questions about your insurance coverage, call the 多宝游戏下载 toll-free at 1-877-ASK-多宝游戏下载 (1-877-275-3342). Also read the deposit insurance information posted on the 多宝游戏下载 website. Single copies of selected publications, including 鈥淵our Insured Deposits,鈥 the 多宝游戏下载's comprehensive guide to deposit insurance coverage, are available free of charge by completing our or by contacting the 多宝游戏下载鈥檚 Public Information Center at the toll-free phone number above. If you are a person who is deaf or hard-of-hearing, please call 1-800-925-4618.