Corporate Deposit Accounts

Copyright (c) 2009 Jeffrey Matsen

Recently, changes in the lending industry and bank failures have led many depositors to be concerned about the safety of their bank accounts. As most people know, many banks and credit unions are covered by the Federal Deposit Insurance Corporation (FDIC) which insures accounts to $ 100,000.00 (credit unions are insured by the National Credit Union Administration [ Ncua]). For many people, a $ 100,000.00 insured amount is more than enough to cover their personal accounts, even if all your single accounts insured bank itself are added and the total is insured up to $ 100,000. For example, if you have a current account and a CD at the same insured bank, and the two accounts in your name only, the two accounts are added together and the total is insured up to $ 100,000. For added protection, you can always divide an amount exceeding $ 100,000.00 between several banks.

However, the accounts of companies often have higher amounts to $ 100,000.00. Under FDIC rules and regulations, corporate accounts are also insured up to $ 100,000.00 combined, even when a company has separate accounts for divisions or units that are not separately incorporated.

One of the largest and most important account held by a corporation is the account of the payroll. The protection of a payroll account that exceeds $ 100,000.00 in special deposits which takes the planning of our office can help with.

Some banks may offer a service where it parallels the accounts from other banks. When the account exceeds the FDIC, they are automatically open an account at another bank for the overflow, as many times as necessary. You can talk to your bank to see if they offer this service. Your company pays may be able to tap into separate accounts and therefore allow you to open separate accounts in separate banks. You can then, for example, have multiple accounts in banks pay separate all insured separately, and all below the limit of $ 100,000.

Second, under FDIC rules and regulations Ās 330.11 (a), if a corporation has deposit accounts with a representative or fiduciary accounts should not be treated as the deposit accounts of the company, but are treated as trust accounts and insured in accordance with the provisions concerning the separate accounts maintained by an agent or trustee and / or provisions relating to accounts of the condominium.

FDIC regulations provide that the interests of each co-owner of a joint account are separately insured even if the account exceeds $ 100,000. The amount of the interest of owners is added to other funds of the co-owner may have on deposit at the bank, and the total is covered up to $ 100,000.

The FDIC will review some of the evidence to determine how the account should be treated. One factor is how the account is titled. For best protection, we recommend the title of your account "XYZ, Inc., as trustee for the XYZ, Inc. employee on the payroll." In addition, payroll accounts must be kept in a separate account from other enterprise funds, and preferably in a separate bank, if possible. All the accounting records maintained by the corporation must show that this account is used solely for payroll and the list of names of employees who are paid from this account, as if they were the owners.

A method does not use would maintain separate accounts, all under the limit of $ 100,000 in your personal name or names of family members. Co-blending of property is a characteristic of the doctrine of piercing the corporate veil, "and this could open yourself to personal liability can meet the debts of the company.

Our research indicates that the above is the best protection your company may have against the FDIC. Welcome.