Payable-on-Death (POD) and In-Trust-For (ITF) accounts are informal revocable trusts that let you name beneficiaries on your bank deposits. These designations control who receives the funds when the owner dies and, importantly, place the deposits in the FDIC trust account category. Understanding how coverage works—especially after the FDIC’s 2024 simplification—can ensure large deposits are protected, beneficiaries are eligible, and records are set up correctly at the bank.

Insurance coverage: how FDIC protects POD/ITF

FDIC insurance covers deposits at insured banks up to specific limits per ownership category. POD and ITF fall under the trust accounts category. Since April 1, 2024, coverage is $250,000 per owner, per eligible primary beneficiary, up to five beneficiaries per owner at each bank. That means a single owner with three primary beneficiaries can receive up to $750,000 of coverage for all POD/ITF deposits at that one bank. Coverage resets at a different FDIC‑insured bank and includes checking, savings, money market deposit accounts, and CDs—not investments or securities.

Finance tips for naming beneficiaries

Only primary, eligible beneficiaries count for insurance purposes. Eligible beneficiaries include people, charities, and certain nonprofits. Contingent beneficiaries do not increase coverage. Make sure the bank’s records show the POD/ITF designation and the beneficiaries’ names; if the bank’s records are unclear, coverage could default to lower limits. Review beneficiaries after life events, confirm spelling and identification details with the bank, and avoid naming the same person in conflicting roles on different accounts without understanding how totals are aggregated per bank.

Financial planning with POD and ITF designations

POD/ITF can streamline transfers outside of probate, but they should align with your broader financial planning. If you have multiple accounts at the same bank—checking, savings, and CDs—with POD/ITF designations, the FDIC combines all of them in the trust category to determine limits. If coverage would be exceeded, consider distributing deposits across more than one insured bank, or adjusting the number of primary beneficiaries. Coordinate with estate documents so beneficiary designations, formal trusts, and wills do not contradict one another.

Investment strategies using CDs under trust coverage

CDs are often used to implement investment strategies focused on capital preservation and predictable income. When titled as POD/ITF, CDs are insured within the same trust category limits. A joint CD with two owners and three primary beneficiaries could be insured up to $1.5 million at one bank (each owner gets $250,000 per beneficiary, up to five). Stagger maturities to maintain liquidity, confirm that automatic renewals keep the POD/ITF titling intact, and track totals across all deposits at the bank to avoid inadvertently exceeding coverage.

Wealth management coordination with estate plans

For households with sizable cash positions, integrate POD/ITF accounts into wealth management decisions. If a formal living trust exists, decide whether deposits belong in the formal trust name or remain as POD/ITF. Under the 2024 rules, both revocable and irrevocable trusts share the same trust category framework, but documentation requirements differ: informal POD/ITF beneficiaries must be named in the bank’s records, while formal trusts rely on the trust document. Keep records updated, ensure eligible beneficiaries are clearly identified, and revisit structure as family circumstances evolve.

Common scenarios and how to calculate limits

Consider three examples to ground the rules. A single owner with four primary beneficiaries at one bank receives up to $1 million of coverage ($250,000 per beneficiary). Two co-owners with two primary beneficiaries receive up to $1 million total ($250,000 × 2 beneficiaries × 2 owners). If a single owner names eight beneficiaries, only the first five count for insurance purposes, capping coverage at $1.25 million at that bank. Spreading excess balances across additional insured banks can restore protection.

What to confirm with your bank

Proper titling is essential. The account must indicate revocable trust intent—terms like “POD,” “ITF,” “as trustee for,” or similar—and list beneficiaries by name in the bank’s deposit records. Verify which deposits qualify (checking, savings, CDs, and money market deposit accounts) and which do not (mutual funds, annuities, stocks, and bonds). Keep a simple inventory of balances by bank, ownership type, and beneficiary count. When in doubt, ask the bank for a written summary of how your accounts are recorded for FDIC purposes.

Key takeaways for durable protection

POD and ITF designations can expand federal insurance beyond the standard single‑owner limit by leveraging the per‑beneficiary framework. The most frequent pitfalls are unclear titling, contingent-only beneficiaries, or exceeding limits unintentionally at a single bank. Periodic reviews, especially after major life changes, help keep coverage aligned with your goals. Align beneficiary choices with your overall plan, document everything in bank records, and diversify across insured institutions when balances grow.

Conclusion FDIC rules for POD and ITF accounts are straightforward when you know the building blocks: eligible primary beneficiaries, per‑owner limits, per‑bank aggregation, and proper titling. By coordinating these accounts with your broader planning and maintaining accurate bank records, you can preserve flexibility for heirs while keeping large cash positions protected under federal deposit insurance.