Federal Deposit Insurance Corporation

After a wave of bank failures in the 1920s and 1930s devastated the American public, the federal government established an independent agency called the Federal Deposit Insurance Corporation to insure against the loss of deposits. The FDIC generally insures deposits up to $100,000 at most U.S. banks. Since the FDIC was founded in 1934, no depositor has lost any amount of insured funds as a result of a bank failure.

While bank failures are very rare, the FDIC has ample funds-totaling more than $44 billion-to insure the more than $3 trillion of deposits at U.S. banks. The funds come from premiums that banks pay for deposit insurance coverage and from earnings on U.S. Treasury securities. FDIC insurance is backed by the full faith and credit of the U.S. government.

How can I tell if my bank is FDIC-insured?

Banks that are insured by the FDIC must display an official FDIC logo at teller windows and stations where deposits are received.

What types of accounts are insured?

FDIC insurance covers all types of accounts at an insured bank, as long as the assets in the account consist of deposits rather than securities. Deposit accounts include checking accounts, savings accounts, certificates of deposit, money market deposit accounts and retirement accounts that consist of cash on deposit at a bank.

How much of my money is covered by FDIC insurance?

Deposits are generally insured up to $100,000 per depositor per insured bank.

If I put my money in several different accounts at the same bank, do I get more insurance?

No. All deposit accounts at the same bank are added together to determine FDIC insurance coverage. However, deposits made under different categories of ownership (such as retirement and nonretirement accounts) at the same bank can be separately insured, making it possible to have insured deposits of more than $100,000 at one bank.

My husband and I have a joint checking account. Do we get more insurance than the $100,000 limit?

Yes. Deposits are insured up to $100,000 per person per bank. You and your husband could have up to $200,000 insured in one or more joint accounts at the same bank.

I have my IRA at the same bank that I have my checking and savings accounts. Is my IRA insured separately?

Yes. As long as your IRA assets are deposits and not securities, they are separately insured by the FDIC up to $100,000 from all your nonretirement deposits at the bank.

Are deposits at different branches of the same bank insured separately?

No. You cannot increase FDIC insurance coverage by making deposits at different branches of the same bank. The main office, all branch offices and any Internet divisions are considered part of one bank.

If I have accounts at different insured banks, are my accounts insured separately by the FDIC?

Yes. Your deposits at each insured bank are insured separately from deposits at other insured banks.

Does FDIC insurance cover the interest I earn from my deposit?

FDIC insurance covers principal and accrued interest up to the insurance limit. If the principal amount were above the limit, then the interest would not be insured. If the principal amount were below the limit, then all or part of the interest would be insured up to the limit.

How quickly will I get my money if my bank fails?

The FDIC typically makes payment on the next business day after the bank closes. The FDIC usually sells the deposits of a failed bank to another bank. Customers either have their insured deposits placed in a new account at another insured bank, or they get reimbursed for the insured amount by check.

Are investments purchased through a bank FDIC insured?

No. Investment products, including stocks, bonds, mutual funds, Treasury securities and annuities are not FDIC-insured, even if you buy them from an insured bank.

Sidebar: Money market deposit accounts are FDIC-insured. Money market mutual funds are not FDIC-insured. One is a deposit; the other is an investment.

Is my safe deposit box insured?

No. The contents of a safe deposit box are not FDIC-insured. If your bank fails, an acquiring bank would most likely take over the failed bank's safe deposit boxes. Otherwise, safe deposit box holders receive instructions on removing the contents.

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