Self Directed IRA

What is a self directed IRA retirement account?

An IRA retirement account is called a self directed IRA if the owner or plan participant has the right to direct the investment of the assets in the IRA account. IRA stands for Individual Retirement Account.

How are funds deposited in IRA retirement accounts and Keoghs insured?

Individual retirement accounts (IRA) and Keogh funds are separately insured from any non retirement account funds the depositor may have at an institution. But IRA and self directed IRA Keogh funds will be added together, and the combined total will be insured up to $100,000.

IRA and self directed IRA Keogh funds will also be aggregated with certain other retirement account funds, namely, those belonging to other self directed IRA retirement accounts, and those belonging to so-called "457 Plan" accounts, if the deposits are eligible for pass-through insurance.

IRA individual retirement accounts and Keogh time deposits made before December 19, 1993, are insured separately from each other and from any other funds of the depositor. Such IRA funds, however, become subject to the aggregation rules explained above when the deposits mature, roll over, or are renewed.

How are the new Roth IRA and Education IRA insured?

Although subject to different tax treatment under the Internal Revenue Code, the new Roth IRA is treated the same as a traditional IRA for deposit insurance purposes. So, if a depositor has both a Roth IRA and a traditional IRA at an insured depository institution, the funds in those accounts would be added together and insured. The new "Education IRA," however, is not considered an IRA for deposit insurance purposes.

Because of the required features of the account, an Education IRA is treated, for deposit insurance purposes, as an irrevocable trust account. So, the FDIC insures an Education IRA under the rules for irrevocable trust accounts.

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