First Union National Bank is trying to lure deposits with offers of $800,000 in insurance coverage on new certificates of deposit.
The "added coverage CD" allows customers to deposit money in any one of eight separately chartered First Union banks. The deposit is then split into eight accounts, one at each bank, that is insured separately up to the $100,000 federal guarantee.
"Now you can take advantage of First Union's strength and size to gain eight times more FDIC insurance - and a lot more convenience," a bank brochure reads.
"It is legal," said David Barr, a spokesman for the Federal Deposit Insurance Corp. "The insurance rules are written so that, as long as your deposits are in separately chartered banks, each deposit is fully insured to $100,000 by the FDIC."