FDIC/NCUA - POD On JOINT ACCOUNTS

bobert456 | Mar 18, 2024 | 187 posts since 2022

Moderator Note: This is a message that bobert456 wanted to include at the top of this thread: "I failed to understand the financial calculators will not allow POD on joint accounts, but when you do list them, they become DUAL OWNER POD accounts."

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I'm 73, and I have been doing this WRONG all this time.

IF you ADD a POD to a JOINT account, for insurance purposes it is no longer JOINT..... it becomes a POD account and follows those rules, not the coverage of JOINT accounts.

SOooo - if you have a joint account, and then decide to add a single POD, you will change the covered insurance down from 500K-joint to 250K (single POD). So make sure you have multiple PODs named (at least 2 to get the 500K back).

When you check the calculators (EDDIE or MYCREDITUNION.GOV), you will see that the drop down has JOINT (no pod) for a reason. You cannot have POD designated and preserve the insurance as 500K you thought you had under JOINT. Insurance looks it as a POD styled account and will add up the people listed times 250K for each one listed.

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milty | Mar 18, 2024 | 1,689 posts since 2018

"SOooo - if you have a joint account, and then decide to add a single POD, you will change the covered insurance down from 500K-joint to 250K (single POD). So make sure you have multiple PODs named (at least 2 to get the 500K back)."

POD beneficiaries affect the insurance coverage, but I don't think that is quite correct. In your example, I believe each joint owner is still insured up to $250K (each owner has 1 named unique beneficiary, so each gets $250K). If there were 2 unique beneficiaries named on this joint account then each joint owner would be insured up to $500K. (That is, each joint owner's coverage = $250K times # of beneficiaries.) At least this is my understanding for accounts with up to 5 beneficiaries. .

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bobert456 | Mar 18, 2024 | 187 posts since 2022

Mitty - exactly to my point. What you have stated is what I THOUGHT it was also, but talked with FDIC folks today and got it clarified that the account may still be JOINT per the bank, but it is NOT joint per insurance. It cannot be joint AND POD at the same time. Can be styled that way, and works that way for ownership .... but NOT for the FDIC/NCUA insurance. SOOooo - adding a POD on a joint account is allowed, but be mindful that the insurance RULES just changed.

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milty | Mar 18, 2024 | 1,689 posts since 2018

That part is true, but in your example, you do not need to have a 2nd named POD to get a total of $500K coverage for that account-- each joint owner will still get $250K due to each having that 1 named beneficiary.

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Coreyfr | Mar 19, 2024 | 19 posts since 2020

I have a joint POD account with 2 beneficiaries and per the ncua calculator we are insured for $1,000,000.

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bobert456 | Mar 19, 2024 | 187 posts since 2022

Coreyfr - thank you for your post. I NOW stand corrected .... if you have a joint account (no beneficiaries) - it is a true JOINT account per the rules. BUT you can have a POD with multiple owners ....... and it follows the POD rules. NEW TWIST ... AGAIN I verified this, and (FDIC) says POD rules are a multiplier, number of owners TIMES number of POD listed, so two owners with 2 POD = 2 owners TIMES 2 listed POD = $1,000,000 coverage. NOT a JOINT account for the rules, but a dual owner POD ( I missed that ). So as of 3/19/24, I stand corrected on this topic and SHOULD NOT HAVE POSTED any warning. - "THANK YOU Corefy, MAK, and P_D."

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bobert456 | Mar 19, 2024 | 187 posts since 2022

EVERYBODY - PLS ignore my posts (BOBERT456) on this topic. I failed to understand the financial calculators will not allow POD on joint accounts, but when you do list them, they become DUAL OWNER POD accounts .... my failure. EVERYONE - PLS accept my sincere apology for starting this thread topic. (KEN ... you might delete this entire thread to eliminate any confusion from my posts.)

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