Jeffrey Wade
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that provides insurance to U.S. banks and thrifts in the event of bank failure. The FDIC insures deposits up to $250,000 per depositor, per FDIC-insured bank, for each account ownership category. This includes checking and savings accounts, certificates of deposit (CDs), money market accounts, IRAs, revocable and irrevocable trust accounts, and employee benefit plans. It's important to note that FDIC insurance only applies to deposit accounts at FDIC-insured banks, and does not cover non-deposit investment products or instances of fraud, theft, or identity theft.
| Characteristics | Values |
|---|---|
| Type of Organization | Independent federal agency |
| Insured Amount | $250,000 per depositor, per FDIC-insured bank |
| Insured Accounts | Checking and savings accounts, certificates of deposit (CDs), money market accounts, IRAs, revocable and irrevocable trust accounts, and employee benefit plans |
| Uninsured Accounts | Mutual funds, annuities, life insurance policies, stocks, bonds, safe deposit boxes |
| Number of Institutions | 4,517 (as of June 2024) |
| Deposit Insurance Fund (DIF) | $129.2 billion (as of Q3 2024) |
| Primary Source of Funding | Member banks' insurance dues |
| Website | FDIC.gov |
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What You'll Learn
FDIC-insured banks and accounts
The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance to protect your money in the event of a bank failure. FDIC deposit insurance covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category. This limit has increased over time to accommodate inflation. As of June 2024, the FDIC provided deposit insurance at 4,517 institutions, with a Deposit Insurance Fund (DIF) of $129.2 billion.
FDIC insurance covers deposits in all types of accounts at FDIC-insured banks, including checking accounts, savings accounts, certificates of deposit (CDs), and money market accounts. Coverage is automatic when you open one of these accounts at an FDIC-insured bank. However, FDIC deposit insurance does not cover non-deposit investment products, even those offered by FDIC-insured banks. Some examples of non-covered items include U.S. Treasury bills, notes, bonds, stocks, mutual funds, safe deposit boxes, and certain payment providers such as PayPal and Venmo.
It is important to note that FDIC insurance only applies to banks and not to non-bank financial institutions. Deposits placed with non-bank financial technology companies are not protected by the FDIC against the failure of the fintech company. If you have concerns about whether your deposits are insured, you can use the FDIC's Electronic Deposit Insurance Estimator (EDIE) or contact them directly.
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Deposit insurance coverage
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation that provides deposit insurance to depositors in American commercial banks and savings banks. The FDIC was established by the Banking Act of 1933 to restore trust in the American banking system following the Great Depression, during which more than one-third of banks failed.
FDIC insurance covers deposits in all types of accounts at FDIC-insured banks, including checking and savings accounts, as well as Certificates of Deposit (CDs). The insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933, no depositor has ever lost a penny of FDIC-insured funds".
The FDIC insures deposits in member banks up to $250,000 per ownership category. Each ownership category of a depositor's money is insured separately up to the insurance limit, and separately at each bank. The distinct ownership categories include single accounts, certain retirement accounts (including Individual Retirement Accounts (IRAs)), joint accounts, revocable and irrevocable trust accounts, employee benefit plan accounts, and corporation/partnership/unincorporated association accounts.
It is important to note that FDIC deposit insurance does not cover non-deposit investment products, even those offered by FDIC-insured banks. Additionally, FDIC insurance only covers deposits in FDIC-insured banks, and does not protect against the default or bankruptcy of any non-FDIC-insured institution. Coverage is automatic when opening an account at an FDIC-insured bank.
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Account ownership categories
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation that provides deposit insurance to depositors in American commercial banks and savings banks. FDIC insurance covers deposits in all types of accounts at FDIC-insured banks, but it does not cover non-deposit investment products, even those offered by FDIC-insured banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system.
The FDIC provides deposit insurance to protect your money in the event of a bank failure. Your deposits are automatically insured to at least $250,000 per depositor, per FDIC-insured bank, for each account ownership category. The ownership categories are as follows:
Single Accounts
Single accounts are those that do not fall into any other category. If you have a single ownership account in one FDIC-insured bank and another single ownership account in a different FDIC-insured bank, you will be insured for up to $250,000 for your single account deposits at each bank.
Certain Retirement Accounts
This includes Individual Retirement Accounts (IRAs). If you have a single ownership account in one FDIC-insured bank and an IRA at the same bank, you will be insured up to $250,000 for the combined balance of the funds in the two accounts. You will also be separately insured up to $250,000 for the funds in the IRA because it is in a different account ownership category.
Joint Accounts
A joint account is a deposit owned by two or more people with no beneficiaries. All co-owners must be living people and must have equal rights to withdraw deposits from the account. FDIC insurance covers joint accounts owned in any manner conforming to applicable state law.
Revocable and Irrevocable Trust Accounts
The owner of a revocable trust account is generally insured up to $250,000 for each unique beneficiary. If there is a single owner of an account that is specified as "in trust for" three different beneficiaries, the funds in the account are insured up to $750,000.
Employee Benefit Plan Accounts
This includes deposits of a pension plan.
Corporation/Partnership/Unincorporated Association Accounts
This includes accounts owned by a corporation, partnership, or unincorporated association. All deposits owned by these entities at the same bank are combined and insured up to $250,000. Accounts owned by the same entity but designated for different purposes are not separately insured.
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Non-deposit investment products
The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance to protect your money in the event of a bank failure. FDIC-insured banks automatically cover your deposits up to $250,000 per depositor for each account ownership category. However, it's important to note that FDIC insurance only applies to deposit accounts, and non-deposit investment products are not insured.
When considering non-deposit investment products, it's essential to understand the risks involved. The value of these investments can fluctuate with market conditions, and there is no guarantee of making a profit. Consumers should carefully consider their financial goals, risk tolerance, and other factors before investing in non-deposit products. Sales representatives are required to disclose whether a product is covered by FDIC insurance, so investors should pay attention to statements indicating that a product is not a deposit or guaranteed by the bank.
To ensure informed decision-making, the FDIC encourages depository institutions to adopt written statements addressing the risks associated with non-deposit investment products. These statements should include compliance procedures, supervision of sales personnel, the types of products sold, and the permissible use of customer information. By providing clear and accurate information, customers can make informed choices while minimizing confusion and safeguarding against liability under federal securities laws.
In summary, while FDIC insurance provides valuable protection for deposit accounts, it is important to recognize that non-deposit investment products are not covered by this insurance. Investors should carefully evaluate their options, understand the associated risks, and work with knowledgeable sales representatives or brokers to make informed decisions about non-deposit investment products.
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Deposit insurance limits
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation that provides deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. The FDIC provides deposit insurance to protect your money in the event of a bank failure.
FDIC deposit insurance covers deposits in all types of accounts at FDIC-insured banks, but it does not cover non-deposit investment products, even those offered by FDIC-insured banks. Additionally, FDIC deposit insurance doesn’t cover default or bankruptcy of any non-FDIC-insured institution. FDIC-insured institutions are permitted to display a sign stating the terms of its insurance—that is, the per-depositor limit and the guarantee of the United States government.
The FDIC insurance covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category. All of your deposits in the same ownership category in the same FDIC-insured bank are added together for the purpose of determining FDIC deposit insurance coverage. However, you may qualify for more than $250,000 in FDIC deposit insurance coverage if you deposit money in accounts that are in different ownership categories. For example, if you have a single ownership account at an FDIC-insured bank, and you have a joint ownership account with one or more people at the same bank, you will be insured for up to $250,000 for your single ownership account deposits and also insured separately for your ownership interest up to $250,000 for all of your joint ownership account deposits.
The distinct ownership categories are:
- Single accounts (accounts not falling into any other category)
- Certain retirement accounts (including Individual Retirement Accounts (IRAs))
- Joint accounts (accounts with more than one owner with equal rights to withdraw)
- Revocable and irrevocable trust accounts (containing the words like "In trust for", etc.)
- Employee Benefit Plan accounts (deposits of a pension plan)
- Corporation/partnership/unincorporated association accounts
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Frequently asked questions
The FDIC insures checking and savings accounts, certificates of deposit (CDs), money market accounts, IRAs, revocable and irrevocable trust accounts, and employee benefit plans.
Mutual funds, annuities, life insurance policies, stocks, bonds, and safe deposit boxes are not insured by the FDIC.
The FDIC insures up to \$250,000 per depositor, per FDIC-insured bank, for each account ownership category.
The FDIC is funded by insurance premiums paid by banks and interest earned on its Deposit Insurance Fund. The FDIC charges premiums based on the risk posed by the insured bank.
