It is important to know how to title a depositor bank account because each title option has its own advantages and disadvantages. Each title provides a different type of protection for your money and for your beneficiaries.
- Single Ownership Accounts. The title of single ownership permits only one person to own the account. A business depositor bank account may also have this title provided the business is a sole proprietorship. All of your accounts from one financial institution are added together to determine if all of your funds are covered by FDIC insurance.
- Joint Ownership Accounts. When two or more people own a depositor bank account, all co-owners have equal access to the funds in the account. Signatures for all co-owners must be provided to the financial institution before the account can be officially opened. Any co-owner may close the account at any time and is not be required to inform the other co-owners beforehand. For FDIC insurance purposes, the total of the funds within the account are divided equally among the co-owners, and added to any other funds in the individuals name from the same institution to determine if all of the funds are covered by insurance.
- Trust Accounts. You should title a depositor bank account as a trust account if you want to name beneficiaries to receive the funds upon your death. A POD, or pay on death account, and the ITF, or in trust for account are two titles that your financial institution may use. If you choose to have more than one beneficiary, you will need to decide what percentage of the funds will go to each person.
Tips & Warnings:
- If you have complicated financial matters, consult an attorney or ask the bank representative to assist you in deciding which depositor title is the correct title for your new account.