New US deposit insurance rules for trust accounts take effect

On 1 April 2024, new requirements for US bank deposit insurance coverage for trust accounts took effect. These requirements apply to insured depository institutions, which include the over 4,500 US banks and similar organizations that are chartered under US law and hold deposits that are insured by the Federal Deposit Insurance Corporation. The new requirements apply retroactively to existing trust accounts, and some individuals may be entitled to more or less deposit insurance coverage than under existing requirements. Further, US-based banks that offer certificates of deposit (CDs), including structured CDs, to investors should be aware of how the new requirements affect their trust account clients’ deposit insurance and investment strategies and should update their program disclosures accordingly.