FDIC limits and payble on death

Yes, it does. This rule went into effect in 2024, so not everyone may be aware of it. The essence of the change is to treat accounts with payable on death beneficiaries similarly to trust accounts, and treat different beneficiaries as separate owners with their own FDIC insurance caps.

See on the FDIC website:

The FDIC amended its regulations governing deposit insurance coverage. The amendments simplify the deposit insurance regulations by establishing a "trust accounts" category that governs coverage of deposits of Payable on Death (POD/ITF) accounts, formal revocable trusts and irrevocable trusts using a common calculation.

Coverage for deposits in this category will be calculated through a simple calculation. Each owner's trust deposits will be insured up to $250,000 multiplied by the number of trust beneficiaries up to a maximum of $1,250,000 per bank.

You can use the FDIC estimator tool to calculate your coverage.