How does a beneficiary receive benefits if an FDIC insured bank goes bankrupt?

Question

I have three questions:

Generally, in the US, can a beneficiary receive the inherited benefits for a certificate of deposits (CD) in a single bank if an account holder (single) who purchased the CDs is still alive but the bank the account holder purchases the CD goes bankrupt?

Generally, in the US, if an account holder (single) has more than $250K (e.g., $300K) in CDs in a single bank and named one beneficiary but before the account holder passes away, the bank goes bankrupt, then how much maximum benefits can the account holder and the beneficiary receive?

Generally, in the US, if an account holder (single) has more than $250K (e.g., $300K) in CDs in a single bank and named one beneficiary but suddenly, the account holder passes away before the bank goes bankrupt, then how much maximum benefits can the beneficiary receive?

Thank you.

Answer 1

Once the owner dies, beneficiary becomes the new owner. The CD might have to go through probate; at the very least you must present evidence of the owner’s death.

Account owners (which includes beneficiaries when they become the owners) are only guaranteed $250k protection, but it’s standard practice that all depositors get all their money.

Note that SVB and Republic are still open. The web sites are up, doors open and computers doing the things computers do for banks. The beneficiary might have to go through some extra red tape when the bank’s assets and customers are taken over by a new bank, but probably not.

Remember: the FDIC exists.