FDIC Deposit Insurance: What You Need to Know

When you deposit money into a bank, you want to be sure that it is safe and secure. This is where the Federal Deposit Insurance Corporation (FDIC) comes in. The FDIC is an independent agency created by Congress in 1933 to maintain public confidence in the banking system. In this article, we will dive into the basics of FDIC deposit insurance, including what it covers, how it works, and how you can make sure your money is protected.

What is FDIC Deposit Insurance?

FDIC deposit insurance is a government program that provides protection to depositors in the event that their bank fails. It was created to ensure that people would not lose their savings in the event of a bank failure, which was a common occurrence during the Great Depression. Today, FDIC deposit insurance covers up to $250,000 per depositor per bank. This means that if your bank were to fail, you would be insured up to $250,000 for each account you have with that bank.

It is important to note that FDIC deposit insurance only covers deposits in banks that are FDIC-insured. You can easily check whether your bank is FDIC-insured by looking for the FDIC symbol on its website, or by using the FDIC’s BankFind tool.

How Does FDIC Deposit Insurance Work?

If your bank were to fail, the FDIC would step in to protect your deposits. The FDIC would either find another bank to take over your deposits, or it would pay you directly. If the FDIC were to find another bank to take over your deposits, you would become a customer of that bank and your deposits would continue to be insured by the FDIC. If the FDIC were to pay you directly, you would receive a check for the insured amount.

If you have more than $250,000 in deposits at one bank, you should consider spreading your deposits across multiple banks in order to ensure that all of your money is insured. You can also look into CDARS, which stands for Certificate of Deposit Account Registry Service. CDARS is a program that allows you to spread your deposits across multiple banks while still dealing with just one bank.

What Does FDIC Deposit Insurance Cover?

FDIC deposit insurance covers a wide range of deposit accounts, including checking accounts, savings accounts, money market accounts, and CDs. It also covers deposits in foreign branches of U.S. banks. However, it does not cover investments in stocks, bonds, mutual funds, or annuities, even if they were purchased through an FDIC-insured bank.

FDIC deposit insurance also does not cover losses due to fraud, theft, or unauthorized transactions in your account. For these types of losses, you should contact your bank immediately and file a dispute.

FAQs

How to Ensure Your Money is Protected

The best way to ensure that your money is protected is to make sure that your bank is FDIC-insured and that your deposits are within the FDIC insurance limits. If you have deposits over $250,000, you should consider spreading your deposits across multiple banks or using a program like CDARS.

You should also keep an eye on your accounts and report any unauthorized transactions or suspicious activity to your bank immediately. By staying vigilant and taking the necessary precautions, you can ensure that your money is safe and secure.