A trust account is a legal arrangement a trustee (third party) holds funds in a bank account for the benefit of another party (the beneficiary), which may be an individual or a group.

Deposits in trust accounts held by banks are protected separately at beneficiary levels and are treated as separate deposits from deposits in other types of accounts for the same beneficiary

A trustee acting for two or more beneficiaries in one trust account is required to submit information on the trust account directly to the bank where the account is maintained. The information must be submitted, as a monthly deposit liability reports.

A trustee acting for two or more beneficiaries is responsible for submitting the following information directly to the bank where the trust account is maintained:

  • The trust account number
  • The name, address and identity card number or passport number or any other identification of the trustee acceptable to the bank
  • The name and address of each beneficiary on monthly basis
  • The amount or percentage of each beneficiary’s interest in the trust account on monthly basis

 

Example of trust account transaction protection information:

a. One beneficiary in a single trust account:

A mother (the account holder as trustee) deposits money in trust for her minor son.

 

b. Two or more beneficiaries in a single trust account:

A law firm (the account holder as trustee) holding funds in trust for multiple clients pending completion of a number of real estate transactions.

Account

Account Holder

Beneficiary Name Or Code

Amount (Kes)

Protected (Kes)

1

Omondi & Co. (Office account of a law firm)

N/A

300,000

Applicable set Limit

2

Omondi & Co. (Client account in trust of a law firm)

x 001

300,000

Applicable set Limit

x 002

300,000

Applicable set Limit

Total deposits

900,000

Total Applicable set Limit

 

c. What if there are several trustees who hold accounts for the same beneficiary in the same member bank?

The beneficiary will receive separate protection up to KES 100,000 for each trust account.

Account

Trustee

Beneficiary

Amount  (Kes)

Protected (Kes)

1

Simiyu & Co.

Hassan

300,000

Applicable set Limit

2

Kamau & Co.

Hassan

300,000

Applicable set Limit

Total deposits

600,000

Total Applicable set Limit

 

d. What if a trustee holds several accounts for the same beneficiary in the same member bank?

All deposits will be combined and protected up to KES 100,000.

Account

Trustee

Beneficiary

Amount (Kes)

1

Korir

Jemutai (Daughter)

150,000

2

Korir

Jemutai (Daughter)

150,000

Total deposits

300,000

Total deposits eligible for protection

Applicable set Limit

  

e. What if a trustee holds several accounts for different beneficiaries in the same member bank?

Each account is protected separately up to KES. 100,000.

Account

Trustee

Beneficiary

Amount (KES)

Protected (KES)

1

Ali

Ahmad (son)

275,000

Applicable set Limit

2

Ali

Sera (daughter)

275,000

Applicable set Limit

Total deposits

550,000

Total Applicable set Limit