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- The Federal Deposit Insurance Corp. (FDIC) insures banking deposits against bank failure. The FDIC was created to maintain the public's confidence in the financial sector through promotion of sound banking practices.
- The FDIC was created after the Great Depression, when some banks closed due to consumers withdrawing all their funds. President Franklin Roosevelt developed the Banking Act of 1933, which led to the creation of the FDIC, an independent U.S. government agency.
- The FDIC covers principal and interest through the date of a bank's closing. The FDIC will cover funds in savings accounts, checking accounts, money market accounts, and certificates of deposits (CDs). The FDIC will insure up to $250,000 in all accounts owned by the same person at the same participating institution. Furthermore, self-directed retirement plans (Roth/traditional IRAs, 401k plans) can also be covered up to $250,000. If there are multiple retirement accounts, they will be added to get the total and only $250,000 will be covered.
- There is no coverage on investments, such as stocks, bonds, Treasuries, municipal securities or mutual funds. The FDIC will not cover such products if offered by a participating banking institution. Retirement plans managed by an administrator also don't qualify.
- Not all banks are participating members of the FDIC insurance program. Not all accounts are insured at a participating bank. Banks are not mandated to be FDIC-insured. So, it is up to the customer to find out whether or not the bank is suitable for their funds. To determine if a bank is FDIC-insured, visit the FDIC website (see Resources).
Identification
History
Coverage
What The FDIC Does Not Cover
Warning
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