The FDIC – short for the Federal Deposit Insurance Corporation is an independent agency of the United States government.
FDIC coverage protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
All FDIC-insured banks must meet high standards for financial strength and stability. The FDIC, with other federal and state regulatory agencies, regularly reviews the operations of insured banks to ensure these standards are met.
The FDIC insures all deposits, including checking, NOW and savings accounts, money market deposit accounts and certificates of deposit (CDs), up to the insurance limit.
On July 21, 2010, the deposit insurance coverage for all deposit accounts was permanently raised to $250,000 per depositor, per insured depository institution for each account ownership category. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, was increased permanently to $250,000 per depositor in 2006.
The FDIC does not insure the money you invest in stocks, mutual funds, life insurance policies, annuities, or municipal securities, even if you purchased these products from an insured bank.
The basic insurance amount is $250,000 per depositor per insured bank.
Calculate the insurance coverage of your accounts with the FDIC's Electronic Deposit Insurance Estimator (EDIE).
Since 1933 the FDIC seal at banks and financial institutions has signified trust and stability to millions of Americans. FDIC deposit insurance is backed by the full faith and credit of the United States government. Since the FDIC’s inception no depositor has ever lost a penny of FDIC insured deposits.
FDIC Deposit insurance enables consumers to confidently deposit their money at FDIC insured banks across the United States. And in the unlikely event of a bank failure guarantees they can get their insured deposits back promptly. These deposits and official items qualify for deposit insurance coverage, at an FDIC insured bank. However, some investments are not insured even if they were purchased at an FDIC insured bank.
The insurance coverage limit is $250,000 per depositor, per ownership category, per FDIC insured bank. It's important to note that all the deposits that the depositor has in the same ownership category at the same bank are added together and insured up to the standard maximum deposit insurance amount for that category.
Owners of accounts in different ownership categories may qualify for more than $250,000 in protection. To ensure that consumers understand how deposit insurance works, the FDIC provides many resources including access to deposit insurance experts to address your unique situation.
To determine coverage limits the FDIC insures accounts based on their ownership category. A single account is an account owned by one person with no beneficiaries. All single accounts at the same bank are added together and insured up to $250,000.
A joint account is a deposit account owned by two or more people with no beneficiaries. Each co-owner shares of all joint accounts at the same insured bank are added together and insured up to $250,000.
Self-directed retirement accounts are insured under the Certain Retirement Accounts ownership category. If an individual has more than one eligible self-directed retirement account at the same bank, the FDIC adds up the deposits held in each account and insures the total amount up to $250,000.
Revocable trust accounts and irrevocable trust accounts are two distinct ownership categories that involve deposits that name beneficiaries. These accounts must meet specific requirements for the owner to qualify for per beneficiary deposit insurance coverage. Specific coverage amounts depend on the type of trust and the number of beneficiaries named by the owner. Business, employee benefit plan and government accounts also qualify for FDIC insurance.
Understanding how the deposits you keep in a single bank are insured by the FDIC is as easy as visiting the FDIC’s website.
At FDIC.gov you can calculate the insurance coverage of your accounts with the Electronic Deposit Insurance Estimator (EDIE).
Find more detailed deposit insurance information and access contact information for FDIC assistance at 877-ASK-FDIC. That's 877-275-3342.
Banks offer a variety of personal accounts to meet your financial needs. Let’s walk through the FDIC coverage for the most common types.
A single account is just that.
A deposit account owned by just one person without named beneficiaries.
An account established by an agent or custodian.
A business account for a sole proprietorship.
An account representing a deceased persons funds.
The FDIC adds together all single accounts owned by the same person at the same bank and ensures the total up to $250,000 dollars.
Example: At her bank, Maggie has four different types of single ownership accounts, totaling $260,000 dollars. How much of Maggie's $260,000 dollars is insured by the FDIC?
While $10,000 dollars is uninsured because it exceeds the coverage limits for single accounts. Maggie also owns a joint account with her husband.
A joint account is an account owned by two or more people without named beneficiaries. Each owner must have equal rights to make withdrawals and have signed the deposit account signature card. Electronic signatures also meet this requirement.
Each co-owner’s share of every joint account at the same insured bank are added together and the total is insured for up to $250,000 assuming all co-owners have equal ownership.
Example: Maggie and her husband co-own three different joint accounts containing $530,000. If Maggie and her husband have equal ownership of these joint accounts and own no other joint accounts at that bank, how much is each of their shares insured for?
Of the $265,000 that belongs to each of them, they each are insured for $250,000 and each of them is uninsured for $15,000.
Example: Maggie is also planning for her future, so she contributes to her self-directed retirement accounts. A self-directed retirement account is an individual retirement account or a self-directed defined contribution plan like a 401k or a profit-sharing plan.
Maggie keeps two types of self-directed retirement accounts at her bank. A traditional IRA and a self-directed profit-sharing plan worth a combined $215,000. How much of it is insured?
All of it. Because it is under the FDIC’s $250,000 insurance limit for certain retirement accounts. Structuring your accounts to maximize your FDIC insurance coverage will ensure that you will not lose a penny of your insured deposits in the unlikely event of a bank failure. Less commonly used personal accounts include trust accounts and employee benefit plans.
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