Dedicated to Deposits: Deals, Data, and Discussion

5.00% 19-Month CD at National City and Update on the POD/FDIC Issue


National City Bank is advertising a new CD special today: 5.00% APY for terms of 19 to 35 months. The minimum deposit is $10,000. The 4.00% money market account special is also being advertised. The 4% APY is guaranteed for 180 days. In Florida, the money market requires a minimum balance of $25,000 to earn the 4%. In Indiana, the minimum balance is advertised as only $5,000. Here's the Florida National City ad and here's the Indiana ad. Note, the Indiana ad states that this is available at National City locations in IN, IL, KY, MI, MO, OH, PA and WI. Both ads list the end date of 9/13/08.

These have the typical National City requirement of an existing checking or savings account or a new checking (except Free checking) with a $1,500 minimum initial deposit. For more details about these offers, please refer to my August 12th National City post.

Beware of Using PODs to Extend Your FDIC Insurance

One of the requirements for a POD account to qualify for higher FDIC coverage is that the POD or similar term be in the account title. It appears that National City does not include this in the account title. A reader had been told by National City that since POD or ITF was on the signature card by the names of the beneficiaries, this would allow for the additional FDIC insurance. To confirm, she faxed a copy of the signature card to the FDIC. She just recently forwarded me the FDIC response. The FDIC representative said this would NOT qualify for the additional coverage. Here's an excerpt of the FDIC reply:
It appears there was an attempt to create an informal revocable trust account, but the account does not comply with FDIC deposit insurance requirements that the title of the account indicates it is a payable on death (POD), in trust for (ITF), or as trustees for (ATF) account.

This is consisent with what another reader reported to me:
I recently noticed that while they are listed in the signature cards, the title of the accounts do not have the required term 'POD' or similar wording.

Several visits and calls to them and they said thats the way our software works. We cannot put it in the title of the account.

I spoke to a senior rep at FDIC today and he told me they have met with officals of the bank and warned them that these accounts DO NOT qualify for FDIC insurance for the expected beneficiaries.

I also have some personal experience on this issue. My dad recently opened a CD at National City with PODs. He sent me the documentation, and I can confirm that there's no mention of POD in the account title. The beneficiaries are only listed in the signature card. Fortunately, the deposit is way below $100K so there's no worry of FDIC coverage.

If you're depending on PODs to extend your FDIC coverage at National City, I would recommend checking with National City and the FDIC to verify coverage for your specific case. More details about using PODs to extend FDIC coverage is available in this post.

National City is another bank that has been hit hard by the housing slump and mortgage crisis. It's always a good idea to stay below the FDIC insurance limits (see my FDIC post for more details). National City's financials can be reviewed at this FDIC page.

Related Pages: money market accounts, CD rates

Related Posts

Comment #1 by Sean (anonymous) posted on
Why would the FDIC require POD/ITF in the account title but the NCUA not?

This posting scares me because I have money over $100K at Alliant CU, and the POD or ITF is not in my account title.

I asked Alliant to put it in, but they said "no, it is not necessary."

The rep assured me that the beneficiaries only need to be on the signature card.

Has anyone ever emailed the NCUA about this (the way someone emailed the FDIC about National City)?

Thank you.

Comment #2 by joan (anonymous) posted on
Credit unions have slightly different unions do NOT require POD's in acct title

Comment #3 by joan (anonymous) posted on
I have about $200K at NCC...$100K in my name only and the second $100K in my name with a sibling as a POD. I have been told by a CSR at NCC repeatedly that "both accts are insured with the FDIC". Further, I have an e-mail from the NCC CSR stating that the second acct has my 'POD in the acct title". What is going on here? Is the NCC rep lying? Who should we believe?

Comment #4 by Bozo (anonymous) posted on
I think the answer is simple. Keep your stuff below $100K and don't risk the hassle.

Just my $.02.

Comment #5 by Trolpher (anonymous) posted on
Joan, credit unions are not insured by the FDIC.

They are insured by the NCUA.

So, your rep has already given you bad info.

I wouldn't trust what any rep tells us anymore.

Both the FDIC and NCUA are government agencies that do the same thing: insure our bank accounts.

The FDIC is firm that the account title must have either POD or ITF in the title.

Why would the NCUA have a different policy?

I don't know if they do? But if they do, the question is why? Why is it OK for the NCUA to not need the account title reflect the revocable trust, but it's not OK for the FDIC?

Comment #6 by joan (anonymous) posted on
I didn't say that credit unions are insured by FDIC!...they aren' unions are insured by NCUA...which does NOT require POD's in the acct title.

I have 2 postings here..the second posting referenced NCC...a BANK and therefore insured by the FDIC.

Comment #7 by Singh (anonymous) posted on
Joan, how do you know for sure that the NCUA does not require the designation POD or ITF in the account title?

The FDIC surely does.

Both agencies do exactly the same thing.

Why wouldn't the NCUA require this?

Any theories (besides the fact that you have been given misinformation)?

Comment #8 by Anonymous posted on
Here are the FDIC regulations.
Notice Section 12CFR330.10(b) titled "Required Intention": Here are the NCUA regulations.
Notice Section 12CFR745.2(b) titled
"Records." Also notice Section 745.4 titled "Revocable Trust Accounts."

Section 330.10(b) specifically spells out the FDIC regulation for account titles. There is no similar provision in the NCUA regulations. Section 745.2(c) simply says that the existence of the trust has to be in the credit union's records.

Comment #9 by Anonymous posted on
The NCUA's position on including POD and similar information in the account title is discussed in the Federal Register Volume 68 Number 249 starting on page 75111. The NCUA had proposed making its regualtions align with the FDIC regulations. Bizarrely, it thought that imposing the title requirements would make it "easier" for members to open simple trust accounts.

But it was bombarded with objections from credit unions and credit union trade associations that complained about the cost of instituting such record keeping requirements and it backed off on the proposal.

Search for "Page 75112" and then find the paragraph that begins with "NCUA also proposed to revise its revocable trust account insurance".
Be sure to read the "Summary of Comments" on page 75113.

Comment #10 by Vince (anonymous) posted on
Thanks for posting those links.

So, after reading that, the conclusion is that a small amount of credit unions (perhaps just 15) protested the requirement that they add 3 little letters (POD or ITF) in one's account title, claiming it would put a burden on them and their computer systems. And the NCUA just backed down?

The FDIC didn't back down, in spite of there being many more banks than credit unions.

This whole thing is very interesting.

Comment #11 by joan (anonymous) posted on
I just got off the telephone with Tony Cavin, a senior CSR at NCC. He is mailing to me a written certificate stating that my sibling IS ON THE ACCT TITLE. He said that he could see it on the NCC screen. He had heard about this blog site and promised to get back to me in the next couple days after reading the site.

It is certainly the case that being on a signature card ONLY is NOT adequate for FDIC insurance.

Comment #12 by Anonymous posted on
Thank you BankGuy,
Just opened my 2nd CD over the weekend for 48mths 5.25% for my rainy day fund that I do not need for awhile. 5.25% is a great rate. And yes, I did keep my amt under the FDIC limit.
Appreciate your site!

Ms Thankful.

Comment #13 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
Joan, if your bank goes under, the delay to get your money over $100K could be great if you don't have the POD/ITF in the account title.

I recommend you threaten to remove your money unless they add the letters to your title. (I did this with both WaMu and Wachovia and they gave me what I wanted. I made them give me a printout that showed the POD in my account titles.)

If the bank refuses to add the POD letters, close your account.

And finally, you typed "sibling" (singular) in your posting.

I hope you know that in order to get $200,000 of coverage, you need two qualifying beneficiaries and not just one.

~O-Qua Tangin Wann

Comment #14 by joan (anonymous) posted on
Regarding the number of siblings..for clarification purposes, the first $100K is in my name alone and the second $100K is in my name with one sibling as POD. So this covers the $200K insurance aspect.

I appreciate the concern about making certain that my sibling POD IS in the ACCT TITLE, since that is absolutely required by the FDIC. Presumably the paperwork that is now being sent to me by NCC will be proper and correct.

I have to say however, that is really irritating that investors should have to be concerned about this. It is as if this is a game and if the vesting isn't done precisely right, it is a case of "got you".

Comment #15 by Sofa King Frustrated (anonymous) posted on
Sofa King Frustrated
I agree with you, Joan. None of this should be so confusing and/or difficult.

But, isn't the entire government run this way?

Comment #16 by joan (anonymous) posted on
An update (for the moment) on the questions of NCC. I have filed a complaint with the Office of Comptroller stating the manner in which NCC assures investors that they "are covered by the FDIC..for amounts over $$ having the POD in the acct title". A lengthy discussion with a manager of one of the NCC branches yesterday showed that he wasn't seemingly aware of "the problem of having the POD vested properly". He said that he would go check with NCC's legal department. He then called back and said that NCC and the FDIC were"working on the problem" and that if anything happened to NCC, the FDIC "accept" NCC's current documentation. When asked if he, the manager, would put this in writing, he said that he "couldn't do that". My further discussions with the FDIC reps yesterday emphasized that one does not "negotiate with the FDIC". Either the terminology at the bank is in the account title....or it is not. If not, IT ISN'T COVERED.

So we will see what happens now. Incidentally, I need to delete the name of Tony Cavin from a previous posting...that was my mistake. I had talked with a multiple number of NCC reps and my notes had the incorrect person.

Comment #17 by O-Qua Tangin Wann (anonymous) posted on
O-Qua Tangin Wann
Good for you, Joan.

Everyone experiencing this kind of situation should be as diligent as you. It might just have the effect of saving/inspiring someone else.


~O-Qua Tangin Wann

Comment #18 by joan (anonymous) posted on
Thanks for your comment, o0qua..!

We shall see what will happen. I did not hear back from the NCC bank manager today..I faxed him a copy of the Complaint. With respect to the FDIC contact e-mail, they typically take l0-15 days to respond. Hopefully NCC won't be taken over by then.

Comment #19 by Anonymous posted on
I think everyone should know that National City Corp is giving depositors false information concerning the inclusion of POD in the account title. I was at a location in the Saint Louis area a couple weeks ago, & the manager said that she checked with the legal department & assured me that POD does not have to be in the account title for the additional FDIC insurance. I know that this is incorrect information that she gave me. I think that more people should report National City for deceiving customers.

Comment #20 by joan (anonymous) posted on
Followup on NCC: NCC has sent me the paperwork for changing the acct title so that it now includes my name, as well as the POD. THe CSR supervisor who did this is the ONLY person at NCC who would listen and act upon the continual requests to get the POD INTO the ACCT TITLE. In affect, this should "manually override" the software and include the POD in the acct title. I am told by the supervixor that new Change of Title/signature card would be "sent to NCC's Data Entry and would be on file".