Listen to Lawrence…FDIC: Corporation/Partnership/Unincorporated/Government Accounts

August 25, 2020


Dear clients and friends,

This LISTEN TO LAWRENCE installment introduces the last two
categories of separate FDIC insurance: CORPORATION/PARTNERSHIP/UNINCORPORATED ASSOCIATION ACCOUNTS and GOVERNMENT ACCOUNTS. Remember, this insurance is in addition to the insurance you get from each of the other categories discussed in my previous emails.

FDIC 7th Category:


Deposits owned by corporations, partnerships, and unincorporated associations, including for-profit and not-for-profit organizations, are insured under this one category and are separate from the personal deposits of the entity’s stockholders, partners or members. Typical unincorporated associations here include churches and other religious organizations, community and civic organizations, and social clubs.

On the other hand, accounts held in the name of a sole proprietorship do not fall under this category; they are insured under the single account category described in an earlier email.

Can you create dummy corporations to increase insurance at a single bank? The answer is no because, in order to be insured under this category, the entity must be engaged in an “independent activity,” that is it must be engaged primarily in some activity other than to just increase FDIC insurance.

All deposits owned by a corporation, partnership, or unincorporated association at the same bank are combined and insured up to $250,000. The purpose of the account is irrelevant.

The number of partners, members, stockholders, or account signatories established by a corporation, partnership, or unincorporated association does not affect insurance coverage.

FDIC 8th Category:


I am including this category for completeness, although most of you couldn’t care less about it and I have no intention of discussing it. I’ll spare you the details. YOU’RE WELCOME! If you are curious, go to FDIC.GOV.

I hope this helps.

Please forward this information to your friends and relatives.

As always, please send me your questions. If you are thinking about it, others are probably too, so my answers will no doubt help you and many others.

Let’s stay connected.


Stay safe!