Final answer:
The simplest way for Hyungsoo to ensure full federal insurance on his $220,000 deposit is to open multiple accounts at different banks, as the FDIC insures up to $250,000 per depositor, per bank. Alternatively, Hyungsoo could split the money between an individual and a joint account at the same bank to capitalize on the per-owner coverage limits.
Step-by-step explanation:
Hyungsoo wants to keep $220,000 in deposits federally insured. The simplest way to accomplish this is to open multiple accounts at different banks (Option A). Since the Federal Deposit Insurance Corporation (FDIC) protects bank deposits up to $250,000 per depositor, per insured bank, for each account ownership category, splitting the money across different banks would ensure that the entire amount is covered by FDIC insurance.
Another method could be to split the amount between individual and joint accounts (Option D) at the same bank, as the FDIC insures up to $250,000 per owner per insured bank. Therefore, if Hyungsoo were to open a joint account with another person, they each would be insured up to $250,000, totaling $500,000 in insurance for the joint account. For Hyungsoo alone, an individual account with $220,000 would be completely insured. Combining these two types of accounts at one bank would thus provide sufficient FDIC coverage.
While using a combination of savings and checking accounts (Option B) could be feasible in certain contexts, these accounts would still fall under the same ownership category and would not increase the total FDIC coverage beyond $250,000 at a single bank. Placing the entire amount into a single account (Option C) would not take full advantage of the FDIC's insurance capabilities, as only $250,000 would be insured, leaving a portion of the funds above this limit unprotected