Podcast Episode - Suze School: What you need to know about FDIC insurance


Credit Union, Insurance, Investing


May 01, 2022

Listen to Podcast Episode:

On today’s Suze School, we get a lesson on how to get more than the $250,000 of FDIC and NCUA insurance that covers your money in banks and credit unions. This is a need to know episode!


Podcast Transcript:

00:00:33
Suze: May 1, 2022 now, before I begin today's podcast, I just have to say to Sophia Rase

00:00:45
Suze: my niece who I love more than life itself

00:00:51
Suze: graduated yesterday from The University of Michigan

00:00:56
Suze: and you know Sophia,

00:00:58
Suze: I know you graduated with honors, I know you've had a stellar four years there,

00:01:04
Suze: but that's not exactly why I'm so proud of you,

00:01:07
Suze: I'm proud of you because of who you are,

00:01:12
Suze: because you have learned

00:01:14
Suze: over these past four years

00:01:17
Suze: to trust yourself more than you trust others.

00:01:22
Suze: And that is a theme

00:01:24
Suze: that I have talked about on this podcast

00:01:27
Suze: for almost three years now and you have embodied that at this point in time

00:01:34
Suze: and for that one reason and one reason only right now

00:01:40
Suze: I am so proud of you

00:01:42
Suze: but I'm also, everybody, talking about this

00:01:46
Suze: because KT and I both watched Sophia

00:01:50
Suze: at her graduation,

00:01:52
Suze: watched it streaming yesterday.

00:01:55
Suze: Actually we couldn't see her because there were so many people but that's besides the point

00:01:59
Suze: and the speaker was Maria Shriver

00:02:03
Suze: the commencement speaker.

00:02:05
Suze: and if any of you

00:02:07
Suze: are lucky enough

00:02:09
Suze: to have ever heard Maria Shriver speak, you know that she is one of the best

00:02:16
Suze: speakers

00:02:18
Suze: ever in the entire world and I do not say that lightly, I had the great good fortune of being able to be on stage with her many times in California

00:02:30
Suze: where she would give these huge events

00:02:33
Suze: mainly for women and they were over the top. Great but the best part of the event was always Maria's talk

00:02:43
Suze: and yesterday

00:02:45
Suze: she gave one of the more incredible

00:02:48
Suze: speeches I have ever heard.

00:02:50
Suze: The reason that I'm telling you all this

00:02:54
Suze: is because while I know she gave it

00:02:57
Suze: to all the graduates

00:02:59
Suze: of the year 2022,

00:03:02
Suze: the truth of the matter is every single one of us needs to hear it

00:03:07
Suze: because it wasn't just about go on and go forth and do this and do that and be great and make this world great. It was about reality.

00:03:17
Suze: It was about the stuff that you never want to talk about that you go through

00:03:23
Suze: and how you have to stand in your truth and you have to have courage and it's okay to fail

00:03:30
Suze: and what all of those things do for you during your life.

00:03:35
Suze: And the reason that I think

00:03:38
Suze: that a lot of you, if you could find it streaming would absolutely benefit from it is because I benefited from it.

00:03:47
Suze: I learned about fear again. Now I know I talked to you all about you gotta face your fears.

00:03:55
Suze: But there was something about her talk yesterday

00:03:59
Suze: that put me smack up in front of the fears that I haven't been willing to face

00:04:08
Suze: the fears such as... and it's okay if I share this with all of you,

00:04:12
Suze: is it with all of you? I hope so.

00:04:14
Suze: I've been afraid

00:04:16
Suze: to get on a stage and speak.

00:04:18
Suze: I've been invited to do so now many times and I've made up an excuse because I don't think

00:04:25
Suze: I have what it takes anymore

00:04:27
Suze: because of all the illnesses that I've been through over the past two years and everything I am afraid to do that.

00:04:36
Suze: I'm just afraid. And it's like Suze Orman you have walked on that stage and you have spoken in front of 200,000 people

00:04:47
Suze: and you couldn't wait to get on that stage

00:04:50
Suze: and now you're afraid.

00:04:54
Suze: And the truth is I am and I have to face that fear

00:05:00
Suze: and Maria's talk yesterday

00:05:02
Suze: really centered me in that there's work I need to do in my life as well. So if you feel that there's work that you need to do in your life

00:05:14
Suze: on any level,

00:05:17
Suze: I'm telling you,

00:05:19
Suze: you've got to look up her talk and listen to it.

00:05:23
Suze: But you're listening to me today

00:05:26
Suze: probably because

00:05:28
Suze: you need to know what to do.

00:05:30
Suze: You need to know

00:05:32
Suze: everything that you're afraid about right now.

00:05:36
Suze: You're most likely afraid when it comes to investing. Should you buy, should you sell what should you do? Should you buy a home? Should you not buy a home? Should you sell the home that you have, should you refinance and get some of the cash out of your home

00:05:51
Suze: in case real estate prices happened to go down

00:05:54
Suze: where's the best place to put cash you just inherited a lot of money and you know, you don't even know what to do with it

00:06:03
Suze: in a 529 plan. Should you keep the money invested and safe for your kids, college educations or go to cash there.

00:06:10
Suze: So many of you are still even confused about I Bonds and in terms of the beneficiary options that you have and you just need to know what to do.

00:06:20
Suze: Now, obviously

00:06:22
Suze: There's no way in a 30 minute podcast given that I've taken up so much of it with other stuff already

00:06:29
Suze: that I could answer all of these questions for you.

00:06:34
Suze: But the truth of the matter is I've been answering them little by little on every single podcast in some form,

00:06:44
Suze: so keep listening

00:06:47
Suze: and we'll see where things go. But you know my thoughts on who should be invested in the market, what you should be doing. I've said all of it time and time again in past podcasts.

00:06:58
Suze: But the one topic

00:07:00
Suze: that I really want to address today

00:07:03
Suze: has to do with cash.

00:07:06
Suze: One thing that I have noticed

00:07:08
Suze: is that your'e emailing me and you're saying the following

00:07:13
Suze: Suze, I just sold my business for $850,000. I don't want to put it in the stock market.

00:07:20
Suze: What should I do with it?

00:07:22
Suze: You're saying to me Suze, I just inherited a lot of money.

00:07:27
Suze: Maybe It's $1 million dollars

00:07:30
Suze: And I just want to keep it in a credit union and or a bank, but it's only insured to 250,000. What can I do?

00:07:39
Suze: And you want to make sure that your money is absolutely safe and sound. You want it liquid. You do not want to tie it up at all. You don't want to tie it up for a year, six months. You just want to know

00:07:54
Suze: that it's there for you and that you can do whatever you want with it when you want to do something with it.

00:08:01
Suze: And therefore your only option

00:08:04
Suze: is a savings account, so to speak. Your simple options.

00:08:09
Suze: So

00:08:10
Suze: I want to talk to you today about how you increase

00:08:16
Suze: the insurance

00:08:18
Suze: on your credit unions and FDIC accounts

00:08:24
Suze: Above the $250,000 limit.

00:08:30
Suze: So

00:08:31
Suze: many of you

00:08:32
Suze: write me

00:08:34
Suze: And you worry me people you're worrying me. You tell me that you opened up an account for $400,000 at Alliant Credit Union

00:08:44
Suze: in order to get the .60% interest rates. So recently you just did this okay.

00:08:50
Suze: And I write you back and I say well how did you take title to that account? Because insurance

00:08:57
Suze: at a credit union is only $250,000.

00:09:01
Suze: And then you give me an answer where you say

00:09:05
Suze: oh it's okay I made it a pay on death account

00:09:10
Suze: to my son.

00:09:11
Suze: So my son gets $250,000 of insurance. And I get $250,000.

00:09:17
Suze: And I write you back I go no you don't

00:09:21
Suze: you don't figure it that way.

00:09:24
Suze: And it wasn't just one email like this, it was many. So today Suze School

00:09:30
Suze: is about, how do you use NCUA or FDIC Insurance, absolutely correctly.

00:09:41
Suze: And how do you increase the amounts

00:09:44
Suze: If you have more than $250,000

00:09:48
Suze: at an institution?

00:09:51
Suze: But let's first start with

00:09:54
Suze: what is NCUA? What is FDIC? Because the truth of the matter is many of you don't know and you shouldn't feel bad about it. I have a feeling that if KT was sitting next to me today and I said what are those things stand for KT, she might go, I don't know.

00:10:13
Suze: I know, I should know,

00:10:14
Suze: I know that I'm insured for 250,000, but I don't know about them.

00:10:19
Suze: Alright, so let's begin our Suze School

00:10:23
Suze: Back in 1933

00:10:26
Suze: during the Great Depression.

00:10:29
Suze: Many banks failed

00:10:32
Suze: and people lost their money and after they lost their money, guess what?

00:10:38
Suze: They did not want to put their money into banks anymore. And you really you can't blame them.

00:10:46
Suze: So

00:10:47
Suze: the government decided in order to create confidence

00:10:51
Suze: in the consumers and the depositors that they would create, what was called

00:10:57
Suze: the Federal deposit insurance corporation

00:11:01
Suze: short FDIC.

00:11:04
Suze: And that this would ensure people's deposits up to a certain amount. So if in fact the banks failed,

00:11:13
Suze: the depositors who had insured deposits. So you only had that amount in that was insured they would always get their money back.

00:11:25
Suze: Now. That amount over the years has increased years ago in your times it was like $100,000

00:11:33
Suze: And around 2007 I believe 2008 right in there, they increased it to $250,000.

00:11:41
Suze: And that's where it stands today.

00:11:45
Suze: In 1970 I think it was March 1970. Credit unions

00:11:52
Suze: also decided

00:11:54
Suze: to make the members of the credit union for their deposits into savings accounts and so forth

00:12:00
Suze: that they would protect them by creating the NCUA. Which stands for the National Credit Union Administration. And it is exactly the same

00:12:13
Suze: as the FDIC is for banks. The NCUA Protects credit unions. So for instance, for those of you who have money in Alliant Credit Union and there are a lot of you out there

00:12:28
Suze: That have absolutely taken advantage of the Alliant credit $100 bonus offer.

00:12:35
Suze: You are insured exactly the same way the same amounts of money as a bank with FDIC Insurance.

00:12:45
Suze: Now

00:12:46
Suze: there are some things that insurance covers

00:12:50
Suze: and then there are some things that it does not cover.

00:12:54
Suze: So both FDIC and NCUA covers things like your checking accounts, your money market accounts, your savings accounts, your CDs, things like that

00:13:07
Suze: now. Just know this

00:13:09
Suze: even though you could possibly have Treasury bills, bonds and notes within an institution like that. The truth of the matter is FDIC Insurance, NCUA . Insurance does not cover Treasury bill bonds and notes.

00:13:26
Suze: And that is because they're guaranteed by the taxing authority of the United States government. So they're insured that way but not under NCUA or FDIC.

00:13:39
Suze: What does

00:13:41
Suze: that Insurance? FDIC or NCUA Insurance not cover?

00:13:47
Suze: it does not cover

00:13:49
Suze: annuities,

00:13:51
Suze: the money that you have in stocks or exchange traded funds or bonds or mutual funds or life insurance policies. It does not cover you if you have, let's say a safe deposit box at a financial institution and you have

00:14:09
Suze: cash in it or whatever it is not covered.

00:14:14
Suze: So you need to know that if let's say at a bank

00:14:19
Suze: or at a credit union you've decided to buy some stock

00:14:23
Suze: and that stock goes down considerably or goes belly up. You are not insured under the NCUA or FDIC limits. Do we have that? Everybody

00:14:37
Suze: Alright next.

00:14:39
Suze: Are you all taking notes? You should all take notes.

00:14:42
Suze: I find it kind of difficult and I'm trying to figure out a new system for all of you by the way where if you're looking for something, you can find it easily

00:14:51
Suze: and where the transcripts are easier to read as well

00:14:56
Suze: because I just think that you should have it be easier.

00:15:00
Suze: And so I'm trying to solve that problem. It's difficult for some reason. I don't quite understand why but I am working on it just so you know. But in the meantime you should take notes. So you don't necessarily have to look back and find it or write down the date

00:15:18
Suze: of the podcast

00:15:20
Suze: that you really might want to revisit.

00:15:23
Suze: Right? So again the April 17 podcast

00:15:28
Suze: on I Bonds a lot of you are revisiting it.

00:15:31
Suze: The February 6th podcast on the five year withdrawal rules for Roth IRAs, a lot of you want to revisit it. So you may want to put down may 1st 2000 and 22 for FDIC or NCUA Insurance if you ever want to revisit it.

00:15:49
Suze: So how does it work?

00:15:53
Suze: It works where you get $250,000 of insurance

00:15:59
Suze: per depositor

00:16:01
Suze: or owner.

00:16:03
Suze: You also get $250,000

00:16:07
Suze: per institution

00:16:10
Suze: or

00:16:11
Suze: You get $250,000 per ownership category.

00:16:18
Suze: So let's just do first per institution.

00:16:22
Suze: Let's say you have $250,000 in bank A.

00:16:28
Suze: And you also

00:16:31
Suze: at a different branch of bank A.

00:16:35
Suze: So you have $250,000 in bank A. In one branch, $250,000 in bank A. But it's a different branch and you think that you are insured.

00:16:49
Suze: You are not,

00:16:51
Suze: it does not matter how many branches you have

00:16:56
Suze: if it is the same institution.

00:16:58
Suze: So all of those branches are bank A. You only are insured for $250,000.

00:17:08
Suze: However,

00:17:09
Suze: If you had $250,000

00:17:13
Suze: Or less obviously in bank A. You had $250,000 in bank B.

00:17:21
Suze: You are insured

00:17:23
Suze: for both of those institutions. So as long as the institutions are different,

00:17:30
Suze: you have insurance.

00:17:32
Suze: If you have different branches under the same institution,

00:17:37
Suze: Over $250,000

00:17:40
Suze: per depositor, you are not insured.

00:17:44
Suze: So that is something you should know about. However,

00:17:48
Suze: another way that you can get more insurance

00:17:52
Suze: is it depends on how you take title to the account at the same institution.

00:18:00
Suze: Let's say you love this one bank or credit union that you're dealing with

00:18:05
Suze: and you want your money there. You have a good relationship with them. That's where you want to be.

00:18:11
Suze: All right, you can open up a single account

00:18:15
Suze: just in your name. You can open up a joint account

00:18:19
Suze: for Suze and KT.

00:18:21
Suze: You can open up a trust account

00:18:24
Suze: which would be Suze trustee for the Suze Orman Living Trust.

00:18:29
Suze: You could open up certain retirement accounts, certain corporation accounts and each one of those is an ownership category.

00:18:39
Suze: So

00:18:40
Suze: Suze

00:18:42
Suze: has $250,000

00:18:46
Suze: in an account.

00:18:48
Suze: I am insured.

00:18:49
Suze: I have another $250,000 in a joint account with KT.

00:18:57
Suze: Now I'm insured up to $500,000.

00:19:02
Suze: Next

00:19:03
Suze: because I just want you to be really clear about this.

00:19:07
Suze: Let's say I have an individual account

00:19:11
Suze: With $250,000 in it

00:19:15
Suze: at a credit union.

00:19:17
Suze: And KT has an individual account with $250,000 in it. At the exact same credit union

00:19:27
Suze: we also have at that credit union a joint account

00:19:34
Suze: With $500,000 in it.

00:19:38
Suze: So together

00:19:40
Suze: We have almost $1 million dollars in this credit union.

00:19:47
Suze: 250,000 for me and one account. 250,000 for KT in another account

00:19:53
Suze: And 500,000 in a joint account.

00:19:57
Suze: But each one of us under

00:20:01
Suze: NCUA insurance. We are each insured for $500,000.

00:20:08
Suze: Do you see how we've increased the $250,000 insurance limit?

00:20:15
Suze: Then there could be a trust account

00:20:18
Suze: and we can go on and on. So depending on the ownership category,

00:20:24
Suze: Your name carries with it $250,000 max of insurance

00:20:31
Suze: depending on how you take title to something.

00:20:36
Suze: So that's another way for you to get more than $250,000 of insurance

00:20:43
Suze: at one institution.

00:20:45
Suze: Another way that you can do it

00:20:49
Suze: is through a pay on death account

00:20:53
Suze: or if you open it up in your trust account.

00:20:58
Suze: So your beneficiaries of that trust account

00:21:02
Suze: can create more insurance for you as well.

00:21:06
Suze: So I'll give you an example.

00:21:08
Suze: I opened up an account

00:21:10
Suze: at

00:21:11
Suze: Alliant Credit Union in just my name

00:21:15
Suze: and on my pay on death

00:21:19
Suze: I list KT

00:21:22
Suze: and I list Lynn. Her twin sister

00:21:26
Suze: when I have listed, listen closely, two beneficiaries

00:21:33
Suze: then I have $500,000 of FDIC or NCUA Insurance on that one account.

00:21:45
Suze: Now you may be thinking but Suze,

00:21:47
Suze: Why don't you have $750,000

00:21:52
Suze: Of Insurance. 250,000 for you.

00:21:56
Suze: 2 50 for KT

00:21:58
Suze: 2 50 for Lynn. Because it doesn't work that way.

00:22:03
Suze: So a simple way

00:22:05
Suze: for you to understand what your actual coverage would be. If you add beneficiaries

00:22:12
Suze: on a pay on death accounts

00:22:15
Suze: that's in your individual name

00:22:18
Suze: would be this.

00:22:19
Suze: I own it.

00:22:21
Suze: And Lynn and KT are my beneficiaries.

00:22:27
Suze: You would times one which means one for you,

00:22:31
Suze: Times your to beneficiaries

00:22:34
Suze: And that equals what 2 1 times two is 2.

00:22:39
Suze: And therefore you would have to,

00:22:43
Suze: times $250,000 for how much FDIC Insurance or NCUA Insurance you actually have.

00:22:51
Suze: So in that case it would be $500,000

00:22:56
Suze: again

00:22:58
Suze: if it were just me

00:23:00
Suze: And I only had KT as a beneficiary. You at times one

00:23:07
Suze: for me.

00:23:09
Suze: Times one

00:23:11
Suze: beneficiary

00:23:13
Suze: Correct? Which equals one.

00:23:16
Suze: So therefore it's only insured for one $250,000 deposit.

00:23:23
Suze: Now think about this. Maybe you have three kids, four kids or more people that you're gonna leave your money to.

00:23:32
Suze: If you had a trust for instance the maximum they're going to allow you to do is five beneficiaries.

00:23:40
Suze: So if you named five beneficiaries on a trust account,

00:23:45
Suze: how much insurance would you have

00:23:47
Suze: one for you? Times five. So that's

00:23:52
Suze: five times $250,000. Is $1,250,000 of FDIC or NCUA Insurance.

00:24:04
Suze: If that is in your trust name. Are you following me?

00:24:09
Suze: But let's say you had a single account.

00:24:13
Suze: You had a joint account,

00:24:15
Suze: you had a trust account.

00:24:18
Suze: Each one of those accounts at the same institution

00:24:23
Suze: Qualifies for each of the owners to have $250,000 of insurance in every one of those categories.

00:24:32
Suze: Plus the beneficiaries

00:24:35
Suze: that you have or the pay on death? People that you've named.

00:24:39
Suze: So do you see how you could have a considerable amount

00:24:44
Suze: of FDIC or NCUA Insurance

00:24:47
Suze: At one financial institution

00:24:52
Suze: and have it all be insured. Now

00:24:55
Suze: you may be saying to me oh Suze I'm not worried about it. I don't think that the banks are going to go under, it's going to be okay. Are you positive?

00:25:06
Suze: Are you absolutely positive?

00:25:09
Suze: Yesterday? I spent really the entire day listening to Warren Buffett and you all should know who Warren Buffett is, address his shareholder meeting

00:25:19
Suze: and he was talking about how he likes cash and the reason that he likes cash

00:25:26
Suze: And how he wants to know that his cash is absolutely safe and sound. And he then talked about 2007 and 2008 and how close we absolutely came

00:25:40
Suze: just shutting down this entire economy and people absolutely losing it

00:25:46
Suze: with financial institutions.

00:25:50
Suze: Do you know that four banks absolutely failed in 2020?

00:25:57
Suze: So you have got to take the approach that anything can happen at any time and if you are lucky enough to have more than $250,000 and substantial sums of money, you have got to know that that money is absolutely safe

00:26:17
Suze: and sound and protected in case your financial institution happens to fail.

00:26:25
Suze: So this Suze school is really, really important for all of you

00:26:31
Suze: and it's important because you're writing me and telling me as I mentioned earlier in this podcast,

00:26:39
Suze: how so many of you have very large sums

00:26:43
Suze: at Alliant Credit Union,

00:26:45
Suze: but yet

00:26:47
Suze: you're not insured because you haven't done it correctly.

00:26:51
Suze: So if you don't want to miss out on the great interest rate of .60, so that alliance is giving you, I've now given you ways to make sure that your money is absolutely safe and sound. It's really just that easy

00:27:09
Suze: now. You might be in different situations altogether

00:27:13
Suze: and you want to know for sure

00:27:15
Suze: are you

00:27:16
Suze: covered by FDIC or NCUA Insurance.

00:27:20
Suze: If you want to know about the money in your bank accounts,

00:27:25
Suze: go to E D I E

00:27:28
Suze: dot F D I C dot gov.

00:27:32
Suze: E D I E by the way stands for Electronic Deposit Insurance Estimator.

00:27:40
Suze: And you go there you put in your particular information of your situation and you can play with it and experiment with it and see if you're insured or not. If you're in a credit union

00:27:53
Suze: go to my credit union dot gov.

00:27:56
Suze: Just that simple and find out. Are you insured under NCUA limits

00:28:03
Suze: according to your own particular situation.

00:28:07
Suze: Alright that is the Suze School for today.

00:28:12
Suze: Please don't be disappointed that I didn't address the stock market last week or other things because the truth of the matter is we're just gonna have to wait and see what happens.

00:28:23
Suze: Hopefully your'e safe sound

00:28:26
Suze: have an investment plan, you're diversified and you know what you're doing

00:28:32
Suze: but really

00:28:34
Suze: time will tell what happens here. Alright everybody so until Thursday with Ms Travis there's really only one thing that I want for all of you and that's for you to be safe. Strong, secure and to listen to Maria Shriver's commencement speech

00:28:52
Suze: That she gave April 30

00:28:54


Take advantage of the Ultimate Opportunity Savings Account with Alliant Credit Union at: https://bit.ly/3vEUTZW

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