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CASH SWEEP PROGRAM DISCLOSURE STATEMENT
Summary
Please consult the full text of the disclosure statement below for further information at the pages indicated.
How the Cash Sweep Program Works
The available sweep options currently consist of one or more money market mutual funds and an interest-bearing deposit account at
Wachovia Bank, N.A. (“WBNA”). Eligibility for each available sweep option is determined by account type. Page 2.
Available Sweep Options
The Cash Sweep Program allows you to earn a return on the uninvested cash balances in your account by automatically placing
(“sweeping”) cash balances into a sweep option until such balances are invested by you or otherwise needed to satisfy obligations
arising in connection with your account. Page 2.
Rate of Return
The rates of return for the sweep options vary over time. Current rates can be obtained from your investment professional, by calling the general inquiries phone number listed on the front of your account statement, or on the website for clients with online account access.
- The rate of return on the bank deposit sweep option is set by WBNA, which may seek to pay as low a rate as possible consistent with
its view of competitive necessities.
- Money market mutual funds seek to achieve the highest rate of return (less fees and expenses) consistent with prudence and their
investment objectives.
- There is no guarantee that the yield on any particular cash sweep option will remain higher than others over any given period. The rate
of return on any of the sweep options may be lower than that of similar investments offered outside of the Cash Sweep Program.
- The Cash Sweep Option should not be viewed as a long-term investment option. If you desire to maintain cash balances for other than a
short-term period and/or are seeking the highest yields currently available in the market, please contact your investment professional to
discuss investment options that may be available outside of the Cash Sweep Program to help maximize your return potential consistent
with your investment objectives and risk tolerance. Page 2.
Duty to Monitor
You must monitor and determine the best sweep option for you under this program. You may also elect not to participate in the Cash
Sweep Program and instead periodically invest cash balances directly. Page 3.
Changes to the Sweep Program
You will be notifi ed if we modify the Cash Sweep Program in a way that results in changing the sweep option for your account. Unless you tell us otherwise within the time period specifi ed in the notice, your cash balances will be moved to the new sweep option that we designate under the program. Page 3.
Differing Risk and Account Protection
Money market mutual funds and the Bank Deposit Sweep Option are subject to different risks and account protection:
- Money market mutual funds invest in high-quality, short-term securities and seek to maintain a stable value; but are subject to market risks and potential value loss. They are not bank accounts and not subject to FDIC insurance protection. They are instead covered by SIPC, which protects against the custodial risk (and not a decline in market value) when a brokerage firm fails by replacing missing securities and cash up to a limit of $500,000, of which $100,000 may be cash.
- The bank deposit sweep option is not subject to market risk and value loss but is subject to the risk of the bank’s failure. In the unlikely event the bank fails, deposits are eligible for FDIC insurance protection up to a limit of $250,000, including principal and interest. This limit includes any other deposits you may have at WBNA outside of this program. You are responsible for monitoring your bank balances in this program and the balances in any of your other bank accounts at the same bank to determine if these, in total, exceed FDIC
insurance limits. Monies held in the bank deposit sweep option are not covered by SIPC. Pages 3 and 4.
Benefits to Us
Fees are charged and certain benefi ts may be received by us under the different sweep options. Because of these fees and benefits, we have a financial incentive to select the particular sweep options included in our program. Page 4.
Securities and Insurance Products: NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY • MAY LOSE VALUE • NOT A DEPOSIT OF OR GUARANTEED BY A BANK OR ANY BANK AFFILIATE
Introduction
Under the Cash Sweep Program (the “Sweep Program”), uninvested cash
balances – for which no interest is otherwise earned or paid – in your account are
automatically swept into your choice of available money market mutual funds
(“Money Market Funds”), an interest-bearing deposit account (“Bank Deposit
Sweep Option”), or such other sweep arrangements made available to you
(collectively “Cash Sweep Options”) until these balances are invested by you or
otherwise needed to satisfy obligations arising in connection with your account.
This Cash Sweep Program Disclosure Statement supersedes any confl icting
terms and conditions contained in your account agreement regarding the cash
sweep program.
Available Cash Sweep Options
Eligibility for each available Cash Sweep Option is determined by account type
and can be obtained from your investment professional. Each eligible Money
Market Fund offered in the Sweep Program is described in a prospectus, which
should be read carefully, and may include one or more Money Market Funds
that an affi liate of our clearing agent, First Clearing, LLC (“Clearing Agent”),
provides investment management or other services to. The Bank Deposit Sweep
Option consists of an interest-bearing deposit account at WBNA, an affi liate of
Clearing Agent. Further information regarding the Bank Deposit Sweep Option
is contained below in the section entitled Additional Information Regarding the
Bank Deposit Sweep Option.
If you do not select a Cash Sweep Option when you open your account, or you
select an ineligible Cash Sweep Option, your Cash Sweep Option will be, and any
cash balances transferred to, the Bank Deposit Sweep Option if you are eligible
(if not, your Cash Sweep Option will be (and any cash balances transferred
to) an available Money Market Fund selected by us). If you wish to specify a
different Cash Sweep Option, if available for your account type, you may do
so at any time by contacting your investment professional. Existing balances in
your prior Cash Sweep Option will be automatically transferred to the new Cash
Sweep Option you select.
How the Sweep Program Works
Available cash balances will be automatically swept in the Cash Sweep Option
for your account on a periodic basis (consult your investment professional for
details on the frequency of this automatic investment/deposit). Shares or cash
held in your Cash Sweep Option will be automatically redeemed in order to settle
a transaction, serve as collateral for a margin loan or short sale, or satisfy any
other obligations.
Timing of Credits. Your Cash Sweep Option will be credited: (i) in the case
of available cash balances resulting from the proceeds of securities sales, on
the settlement date of the securities sale, and (ii) in the case of available cash
balances resulting from non-trade-related credits (i.e., the receipt of dividends,
interest payments, or deposits), on the business day after receipt by us of the
non-trade-related credit (unless there is a trade-related debit item pending in
your account due to settle in one business day, in which case only that amount
exceeding the trade-related debit will be credited to your Cash Sweep Option).
Available cash balances will not earn a rate of return until invested or deposited
into your Cash Sweep Option.
Timing of Debits. Your Cash Sweep Option is automatically debited to
satisfy obligations arising in connection with your brokerage account, including
administrative and other fees, and charges in connection with a margin account.
Cash Sweep Option balances will also be debited as necessary in connection
with certain account activity and services, including securities transactions, preauthorized electronic transfers, automated payments, checks, or debits from using the linked credit cards. Your brokerage account will be scanned automatically
for debit items each day. Debit balances will be satisfi ed automatically from:
(i) available cash balances; (ii) funds in any Money Market Fund no longer
serving as your Cash Sweep Option, (iii) through the withdrawal of funds from
your Cash Sweep Option; and, where applicable, (iv) from margin loans.
Access to Funds. You may only access the balances held in your Cash
Sweep Option through your brokerage account. You cannot withdraw funds by
contacting WBNA or the Money Market Funds directly. As required by federal
banking regulations, WBNA reserves the right to require seven days prior notice
before permitting a transfer out of the Bank Deposit Sweep Option. WBNA has
no intention of exercising this right at the present time. In addition, the Money
Market Funds may reserve the right to require one or more days prior notice
before permitting withdrawals. Please review the prospectus for the Money
Market Fund for further information.
Statements and Confirmations. Your account statement will indicate your
balance, detail transactions, and refl ect interest or dividends relating to your
Cash Sweep Option. These account statements are provided in lieu of separate
confi rmations of sweep transactions.
Interest/Dividends Payable. Interest on cash in the Bank Deposit Sweep
Option is accrued daily, compounded monthly and credited to your account on
the last business day of each monthly statement period. Dividends on the shares
in the Money Market Funds will not be payable in cash but will be reinvested
each month in additional shares of the applicable Money Market Fund at the
current net asset value. Dividends are not guaranteed and are subject to change
or elimination.
Rate of Return
The rate of return for each available Cash Sweep Option can be obtained from
your investment professional, by calling the general inquiries phone number
listed on the front of your account statement or, for clients with online account
access, on our website. These rates will vary over time and may be lower than
rates available to clients taking deposits directly with WBNA, or at other banks,
or available by investing directly in other money market mutual funds not offered
through the Sweep Program.
The rate of interest paid on the Bank Deposit Sweep Option will be established
periodically by WBNA, based upon prevailing business and economic conditions.
The rate may vary by account type and/or tiered based upon account value.
WBNA does not have a duty to provide the highest rates prudently available and
may instead seek to pay as low a rate as possible consistent with its view of
competitive necessities. Lower rates may be more benefi cial to us, WBNA and its
affi liates, and their respective personnel. There is no necessary linkage between
bank rates of interest and the highest rates available in the market, including
any money market mutual fund rates. By comparison, a Money Market Fund
generally seeks to achieve the highest rate of return (less fees and expenses)
consistent with the fund’s investment objective, which can be found in the fund’s
prospectus. (Money Market Fund rates may, however, be impacted by the fees
imposed by the particular class of shares selected by us for the Sweep Program.)
As a result, the current rate of return on each Cash Sweep Option will vary over
time, and there is no guarantee that the return on any particular Cash Sweep
Option will remain higher than the others over any given period. The Cash Sweep
Option should not be viewed as a long-term investment option. If you desire,
as part of an investment strategy or otherwise, to maintain cash balances for
other than a short period of time and/or are seeking the highest yields currently
available in the market for your cash balances, please contact your investment
professional to discuss investment options that may be available outside of
the Cash Sweep Program to help maximize your return potential consistent
with your investment objectives and risk tolerance. Please note, however, that
available cash accumulating in your account will not be automatically swept
into any investment you purchase outside of the Sweep Program.
Your Responsibility to Monitor Your Cash Sweep Option
As returns on the Cash Sweep Options, your personal fi nancial circumstances
and other factors change, it may be in your fi nancial interest to change your Cash
Sweep Option (if another option is available for your account type) or invest cash
in other investment vehicles outside of the Sweep Program consistent with your
investment objectives and risk tolerance. We do not have any duty to monitor
the Cash Sweep Option for your account or make recommendations about, or
changes to, the Sweep Program that might be benefi cial to you.
Alternatives to the Sweep Program
You may elect not to participate in the Sweep Program, and/or periodically invest
cash balances directly in available money market mutual funds offered as direct
investments outside of the Sweep Program, by providing instructions to your
investment professional. Please note if you elect not to participate in the Sweep
Program, accruing cash balances will not earn a rate of return prior to direct
investment. In addition, available cash will not be automatically swept into any
money market mutual fund or other investment that you purchase outside of the
Sweep Program.
Your investment professional can provide further details and additional
information, including a prospectus, for any of the money market mutual funds
available for direct investment outside of the Sweep Program. Please read the
prospectus carefully before investing. Investments in money market mutual funds
are not guaranteed or insured by the FDIC or any other government agency, and
are not deposits of a bank or bank affi liate, including WBNA. Although money
market mutual funds seek to preserve their net asset value at one dollar per
share, it is possible to lose money by investing in money market mutual funds.
Changes to Cash Sweep Options
From time to time, the Clearing Agent may modify the Sweep Program, which may
result in changing the Cash Sweep Option for your account. If the Clearing Agent
makes any change, there is no guarantee that such change will provide a greater
rate of return to you during any given period, and the rate of return may be lower.
You will receive advance notice of any change in the Sweep Program that results
in changing the Cash Sweep Option for your account. Unless you object within
the time period specifi ed, the balances from your prior Cash Sweep Option will
be transferred into any new Cash Sweep Option.
If you decide to enroll in a new product or service that doesn’t offer your current
Cash Sweep Option, your new Cash Sweep Option will become the Bank Deposit
Sweep Option if you are eligible (if not, your Cash Sweep Option will be an
available Money Market Fund selected by us), unless you select a different
available Cash Sweep Option.
Administrative Fee
In addition to any other fees and expenses charged directly by the Money
Market Funds, an administrative fee is charged at an annualized rate of 20 basis
points (0.20%) of assets invested in the Class A share class of the Evergreen
Money Market Funds. This fee will be directly deducted from the dividends you
receive from these Money Market Funds, and your periodic account statement
will refl ect such dividends net of this fee. The administrative fee is intended to compensate the Clearing Agent for administrative services provided in offering
the Sweep Program, for related processing costs, and account maintenance
services provided in connection with processing sweep transactions. Because
the administrative fee is not charged by the Money Market Fund, the Clearing
Agent will report to the Internal Revenue Service (e.g., on Form 1099-DIV) the
total amount of dividends paid to you by the Money Market Fund (i.e., the gross
dividend), not the dividend after deduction of the administrative fee (i.e., the
net dividend). In contrast, the estimated current yield for Money Market Funds
shown on account statements will refl ect the net dividend after deduction of the
administrative fee. You should consult with your tax advisor as to the deductibility
of this administrative fee. The administrative fee is not charged on the Bank
Deposit Sweep Option or with respect to ERISA or IRA accounts participating in
any of the investment advisory programs offered through us.
Benefi ts to Our Firm And Others
We (including, in all instances, Clearing Agent and its affi liates) receive fees and
benefi ts for services provided in connection with the Sweep Program, and we
may choose to make available the Cash Sweep Options that are more profi table
to us than other money market mutual funds or bank deposit accounts.
We may receive distribution (Rule 12b-1), investment management, service fees
and other compensation as a result of sweeping available cash into the Money
Market Funds. These fees, which vary depending on the Money Market Fund (and
class thereof) used, are paid directly by the Money Market Funds but ultimately
borne by you as a shareholder in the fund.
We benefi t fi nancially from cash balances held in the Bank Deposit Sweep Option
as well. WBNA earns net income from the difference between the interest it pays
on deposit accounts, such as the Bank Deposit Sweep Option, and the income
it earns on loans, investments and other assets. As noted above, WBNA may pay
rates of interest on the Bank Deposit Sweep Option that are lower than prevailing
market interest rates. The participation of WBNA in the Bank Deposit Sweep is
expected to increase its respective deposits and, accordingly, overall profi ts. We
may receive fees and compensation of up to two percent (2.0%) from WBNA
and/or its affi liates based on the average monthly deposit balances in the Bank
Deposit Sweep Option (computed on an annualized basis). This compensation
is subject to change, and we may waive all or any part of this fee at any time
without notice. We shall also receive a benefi t by retaining any interest earned
(generally at the Federal Funds rate) on cash balances awaiting disbursement
or prior to such balances being swept into your Cash Sweep Option. As a result
of the fees and benefi ts described above, the Bank Deposit Sweep Option may
signifi cantly be more profi table to us than other available Cash Sweep Options.
SIPC Insurance
The Securities Investor Protection Corporation (SIPC) protects customers of its
members against the custodial risk to clients of securities brokerage fi rms in
the event such fi rms become insolvent. Unlike FDIC insurance, SIPC does not
insure against the failure of a security, the quality of investments, or declines in
the value of investments. Instead, SIPC protects each client’s securities (which
include Money Market Funds), and cash held in a client’s brokerage account at
an insolvent brokerage fi rm, by replacing missing securities and cash of up to
$500,000 per client, including $100,000 for claims for cash. The Clearing Agent
provides additional coverage, at no cost to you, through London Underwriters (led
by Lloyd’s of London Syndicate) (“Lloyd’s”). For clients who have received the full
SIPC payout limit, the Clearing Agent’s policy with Lloyd’s provides additional
coverage above the SIPC limits for any missing securities and cash in client
brokerage accounts up to a Clearing Firm aggregate limit of $1 billion (including
up to $1.9 million for cash per client). This account protection package does
not cover losses resulting from declines in the market value of your investments.
For more information on SIPC coverage, please see the explanatory brochure
at www.sipc.org or call 202-371-8300. For more information about Lloyd’s,
please visit www.lloyds.com. Since monies in the Bank Deposit Sweep are held
at banks, they are NOT covered by SIPC or Lloyd’s. They are instead covered by
FDIC insurance. Please see the section entitled FDIC Insurance Coverage below.
Additional Information Regarding the Bank Deposit Sweep Option
Introduction
The Bank Deposit Sweep Option consists of an interest-bearing deposit account
at WBNA, a depository institution regulated by the Offi ce of the Comptroller of
the Currency under various federal banking laws and regulations, and affi liated
with Clearing Agent. If the Bank Deposit Sweep Option is your Cash Sweep
Option, available cash balances in your account are automatically deposited
into the Bank Deposit Sweep Option.
Deposits
Periodically, the uninvested cash balances in your brokerage account will be
deposited at one or more bank deposit accounts maintained at WBNA. No
evidence of ownership, such as a passbook or certifi cate, will be issued to you,
and deposits in the Bank Deposit Sweep Option may be made in the name
of Clearing Agent (or its agents) for the benefi t of our clients. However, your
brokerage account statement will refl ect all deposits, withdrawals, WBNA deposit
balance(s) and applicable interest rate.
Cash intended for deposit into the Bank Deposit Sweep Option must be deposited
through your brokerage account and cannot be placed directly by you into WBNA.
Only balances transferred by the Clearing Agent will be eligible for inclusion in
the Bank Deposit Sweep Option, and deposits by you into WBNA, outside of the
Bank Deposit Sweep, may adversely affect the FDIC coverage of your funds.
Withdrawals
Monies on deposit at WBNA will be automatically withdrawn from the bank
deposit accounts in the event of a debit in your account or, on settlement date,
to pay for securities purchased for or sold to your brokerage account. Debits
may also be created by writing a check on your brokerage account, making
payments via online bill-payment service, withdrawing funds through your debit
card, or to pay other liabilities owed to us. Checks, ACH payments, debit cards,
ATM withdrawals, direct deposits, credits and other transactions and items for
your brokerage account are processed through that account rather than through
the bank deposit accounts. The Clearing Agent will debit and credit your bank
deposits to accommodate this processing.
FDIC Insurance Coverage
Balances on deposit in the Bank Deposit Sweep Option, together with any
other of your deposits at WBNA, are eligible for federal deposit insurance up
to $250,000, including principal and interest in accordance with rules of the
Federal Deposit Insurance Corporation (“FDIC”). If you have other deposits at
WBNA outside of the Sweep Program, you must aggregate all such deposits
with your Bank Deposit Sweep Option balance for purposes of determining FDIC
coverage. If your total funds on deposit at WBNA exceed the applicable FDIC
insurance limit, the FDIC will not insure your funds in excess of the limit. Different
ownership categories of accounts are separately insured. Please see the Deposit
Insurance — General Information section below for further information.
Please note that you are responsible for monitoring the total amount of your
deposits at WBNA in order to determine the extent of FDIC insurance coverage
available. If you expect to have total deposits at WBNA, including balances
through the Sweep Program, that exceed FDIC insurance coverage limits, you
should carefully consider whether you should arrange for other investment
options for amounts in excess of such coverage in order to reduce your
investment risk.
In the event that federal deposit insurance payments become necessary,
payments of principal, plus unpaid and accrued interest, will be made to you by
the FDIC. However, there is no specifi c time period during which the FDIC must
make insurance payments available. Furthermore, you may be required to provide
certain documentation to the FDIC before insurance payments are made.
If you have additional questions about FDIC insurance, please contact your
investment professional. You may wish to seek advice from your own attorney
concerning FDIC insurance coverage of deposits held in more than one capacity.
You may also obtain publicly available information by contacting the FDIC, Offi ce
of Consumer Affairs, by letter (550 17th Street, N.W., Washington, D.C. 20429),
by phone (877-275-3342 or 800-925-4618 (TDD)), or by accessing the FDIC
website at www.fdic.gov.
Differences Between the Bank Deposit Sweep Option
And Money Market Funds
The Money Market Funds available as Cash Sweep Options are registered with
the SEC pursuant to the Investment Company Act of 1940. The Bank Deposit
Sweep Option consists of an interest-bearing deposit account at WBNA, which is
regulated by the Offi ce of the Comptroller of the Currency under various federal
banking laws and regulations. Deposits in the Bank Deposit Sweep Option
are eligible for FDIC insurance as described above. The Money Market Funds
purchase high-quality, short-term securities in seeking to maintain their net asset
value of one dollar per share. There is no guarantee that this net asset value per
share will always be maintained, and you may lose money by investing in Money
Market Funds. Funds invested in a Money Market Fund are not guaranteed or
insured by the FDIC or any other government agency, and are not deposits of a
bank or bank affi liate, including WBNA.
Changes to Sweep Banks
We may, from time to time, make changes in the Sweep Program that include
making available deposit accounts at banks other than WBNA. In such instances,
you will be notifi ed in advance of the change if it affects your account. If WBNA
no longer makes the Bank Deposit Sweep Option available, you will be provided
the opportunity to establish a direct depository relationship with WBNA,
subject to their policies and procedures. If you do not wish to establish a direct
relationship with WBNA, your funds will be transferred to another available sweep
bank. The consequences of maintaining a direct depository relationship with
WBNA are discussed below under Relationship with WBNA. We may notify you of
any of these changes by means of a letter, an entry on your brokerage account
statement, an entry on a trade confi rmation or by other means.
Information About WBNA
WBNA is a wholly-owned subsidiary of Wells Fargo & Company, the fourth largest
bank holding company in the United States based on assets (“Wells Fargo”).
WBNA is regulated by the Offi ce of the Comptroller of the Currency under various
federal banking laws and regulations. Additional information regarding WBNA
and Wells Fargo is available at www.wachovia.com. WBNA is a corporate affi liate
of Clearing Agent.
Deposits in the Bank Deposit Sweep Option held at WBNA are obligations of
WBNA only and are not obligations of, or guaranteed by, us, Wells Fargo or any
of its affi liates. Neither we, Wells Fargo nor the Clearing Agent guarantees in any
way the fi nancial condition of WBNA, nor are they responsible for any insured or
uninsured portion of any deposits with WBNA.
Relationship with WBNA
We will act as your agent in establishing and maintaining the Bank Deposit
Sweep Option, including making deposits to and withdrawals from the Bank
Deposit Sweep Option. Your fi rst deposit into the Bank Deposit Sweep Option
will constitute your appointment of us as your agent in connection with your
Bank Deposit Sweep Option. No evidence of ownership, such as a passbook or
certifi cate, will be issued to you, and deposits in the Bank Deposit Sweep Option
may be made in the name of Clearing Agent for the benefi t of our customers.
Accordingly, all transactions involving the Bank Deposit Sweep Option must be
made through us.
If you decide to remove us as your agent with respect to the Bank Deposit
Sweep Option, you may establish a direct depository relationship with WBNA by
requesting to have your deposit relationship established in your name, subject
to applicable law and WBNA’s terms and conditions. If we terminate your use of
the Bank Deposit Sweep Option, or if you choose to remove us as your agent with
respect to the Bank Deposit Sweep Option, we will have no further responsibility
for automatically crediting your brokerage account with payments made with
respect to your accounts with WBNA, and will not automatically withdraw funds
from your accounts with WBNA to satisfy debits in your brokerage account.
Deposit Insurance – General Information
Coverage limits effective through December 31, 2009.
General Information. The Bank Deposit Sweep Option is insured by the FDIC,
an independent agency of the U.S. government. Deposits (including principal
and interest) at Wachovia Bank are eligible for federal deposit insurance up
to $250,000, in accordance with the rules of the FDIC. Your funds become
eligible for deposit insurance immediately upon placement in the Bank Deposit
Sweep Option. Any deposits that you maintain directly with WBNA, or through an
intermediary (such as us or another broker), will be aggregated with your Bank
Deposit Sweep Option at WBNA for purposes of FDIC insurance coverage limits.
In the unlikely event that federal deposit insurance payments become necessary,
payments of principal, plus unpaid and accrued interest, will be made to you.
There is no specifi c time period during which the FDIC must make insurance
payments available. Furthermore, you may be required to provide certain
documentation to the FDIC and to us before insurance payments are made.
For example, if you hold deposits as trustee for the benefi t of trust participants,
you may be required to furnish affi davits and provide indemnities regarding an
insurance payment.
The application of FDIC insurance-coverage limits is illustrated by several
common factual situations discussed below.
Single Accounts. Accounts owned by one person, and titled in that person’s
name only, are added together and the total insured up to $250,000. This account
category does not include joint accounts, certain trusts, and individual retirement
accounts, which are protected in a separate category and discussed below.
Custodial Accounts. Funds in accounts held by a custodian (for example,
under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act) are
not treated as owned by the custodian, but are added to other deposits of the
minor and insured up to $250,000 in the aggregate.
Joint Accounts. For accounts owned by two or more people, each person’s
share is insured up to $250,000 separately, in addition to the $250,000 allowed
on other deposits owned individually. For example, a joint account owned by two
persons would be eligible for insurance coverage of up to $500,000 ($250,000
for each person), subject to aggregation with each owner’s interest in other joint
accounts at the same depository institution.
Revocable Trust Accounts. Generally, deposits held in accounts where the
owner evidences an intent that at his or her death the funds belong to one or
more individuals (frequently referred to as a “Totten trust” account, “payable
upon death” account or other type of revocable trust account) will be aggregated
with other funds of the owner held in an individual capacity at WBNA and insured
up to a maximum of $250,000. However, revocable trust accounts will be insured
as to each named benefi ciary, separately from another account of the owner or
the benefi ciary. However, a revocable trust account established by a husband
and wife that names the husband and wife as sole benefi ciaries will be treated
as a joint account, and will be aggregated with other joint accounts subject to
the rules described above under “Joint Accounts.”
Irrevocable Trust Accounts. Deposits in an account established pursuant
to one or more irrevocable trust agreements created by the same person will
be insured for up to $250,000 for the interest of each benefi ciary, provided
that the benefi ciary’s interest in the account is non-contingent (i.e., capable of
determination without evaluation of contingencies). The deposit insurance of each
benefi ciary’s interest is separate from the coverage provided for other accounts
maintained by the benefi ciary, the grantor, the trustee or other benefi ciaries. A
benefi ciary’s interest in funds held in irrevocable trust accounts created by the
same person will be aggregated and insured up to $250,000.
Individual Retirement Accounts. Deposits held in self-directed retirement
accounts, including traditional, Roth, SEP and SIMPLE IRAs, are insured up to
$250,000 in the aggregate.
Accounts carried by First Clearing, LLC, Member NYSE/SIPC. 0000568205 [76406-v1] 06/09 |
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