What is the FDIC?

About the FDIC

The Federal Deposit Insurance Corporation, usually referred to as the FDIC, is the agency of the United States government responsible for insuring bank deposits and, by extension, the banks themselves. This coverage is mandatory for all banks and savings and loans that are members of the Federal Reserve bank system or are nationally chartered.

Savings accounts, checking accounts, money market accounts, and certificates of deposit can be insured by the FDIC – generally up to $100,000 per account. The FDIC does not insure stocks, bonds, mutual funds, life insurance, or annuities, even if purchased from an insured bank.

Usually, the bank itself will proudly display, online, in branches, and in its marketing materials, that its deposits are insured by the FDIC.  Consumers can also check whether a bank or savings and loan is insured by visiting the FDIC website.

Having this insurance is an important designation for banks. It indicates that the operations of the bank have been reviewed and that they met the standards of state and federal regulators. It also indicates that if a bank does fail, a consumer’s deposits will be insured, dollar for dollar, up to the limit of the account.