What are the benefits of having a bank pod account?

A significant benefit of POD accounts is that an account owner can increase their coverage limit under the Federal Deposit Insurance Corp. (FDIC). The standard coverage limit for an individual’s assets at a particular financial institution, including checking and savings accounts, money market accounts, and CDs, is $250,000. 1

What is the FDIC coverage for a bank POD account?

Since a POD is a type of revocable living trust that has someone else with a beneficiary interest on the account, the FDIC provides up to $1,250,000 coverage on up to five accounts at a single bank where each account has a different named beneficiary. Each beneficiary cannot be covered for more than $250,000.

Are there any risks involved with using a pod account?

Assets that are encumbered with loans might be financially at-risk when someone dies if the money is not available to continue making payments. This is why some people add the POD designation to their bank accounts. Debt levels are at all-time highs with outstanding balances accruing interest.