The Federal Deposit Insurance Corp., or FDIC, is an independent federal agency that was established in 1933 in the wake of the bank failures of the 1920s and 1930s. The FDIC insures certain types of deposits at banks and savings associations in the United States and also monitors and responds to risks and financial institution failures that could affect the U.S. banking system or economy. FDIC insurance protects depositors against the loss of their money in the event the bank fails. Insurance limits are the same for all covered accounts.
Standard Coverage Limit
FDIC insures deposits up to $250,000 at FDIC-insured banks and savings associations. The insurance limit is applied to each depositor at an insured bank and includes separate insurance for different categories of account ownership that meet FDIC requirements. Accounts a depositor has at one bank and which are in the same account category are totaled and insured up to the standard insurance limit. Deposits made at different branches of the same bank are not covered separately.
Depositors receive FDIC insurance for funds held in banks with different charters. For instance, your Bank A account is insured for up to $250,000 and your Bank B account is insured up to $250,000. The FDIC applies the term “ownership categories” to different account categories, which means a depositor with multiple accounts could qualify for more than the standard insurance limit if all requirements are met.
The FDIC insures all deposit accounts, including savings, checking, money market and certificates of deposit. Single accounts are covered for one owner and joint accounts are covered up to the standard limit for each co-owner. Certain retirement accounts, including individual retirement accounts or IRAs, are covered up to the limit for the owner. Revocable trust accounts are covered per owner and for each of up to five beneficiaries, although additional beneficiaries may be covered if FDIC requirements are met. FDIC provides insurance coverage for unincorporated association accounts, corporations and partnerships. Coverage extends to all plan participants of employee benefit accounts and to each custodian of government accounts.
The FDIC does not insure bonds, stocks, Treasury securities, life insurance policies, mutual fund shares, securities, annuities or other financial services or investment products banks may offer. The FDIC also does not insure safe deposit boxes. Other non-FDIC bank insurance covers the loss of funds due to theft, disasters or unauthorized account access.
The National Credit Union Administration insures consumer shares up $250,000 for individual account holders at federally insured credit unions. The FDIC website provides EDIE, or Electronic Deposit Insurance Estimator, which is an online calculator that bankers and consumers can use to find out which deposits are insured and the portion of the deposits that might exceed FDIC coverage limits.
- Federal Deposit Insurance Corporation: History of the FDIC
- Federal Deposit Insurance Corporation: Frequently Asked Questions About FDIC
- Federal Deposit Insurance Corporation: Deposit Insurance Summary
- Federal Deposit Insurance Corporation: Insured or Not Insured?
- Federal Deposit Insurance Corporation: Deposit Insurance FAQs
- National Credit Union Administration: NCUA Share Insurance FAQ’s
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