FDIC Insured Deposits
WHAT IS THE FDIC?
The FDIC—short for the Federal Deposit Insurance Corporation—is an independent agency of the United States government. The FDIC protects depositors of insured banks located in the United States against the loss of their deposits if an insured bank fails.
Any person or entity can have FDIC insurance coverage in an insured bank. A person does not have to be a U.S. citizen or resident to have his or her deposits insured by the FDIC.
FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC began operations in 1934, no depositor has ever lost a penny of FDIC-insured deposits.
FDIC COVERAGE BASICS
FDIC insurance covers depositors’ accounts at each insured bank, dollar-for-dollar, including principal and any accrued interest through the date of the insured bank’s closing, up to the insurance limit.
FDIC insurance covers all types of deposits received at an insured bank but does not cover investments, even if they were purchased at an insured bank.
WHAT THE FDIC COVERS
- Checking accounts
- Negotiable Order of Withdrawal (NOW) accounts
- Savings accounts
- Money market deposit accounts (MMDA)
- Time deposits such as certifcates of deposit (CDs)
- Cashier’s checks, money orders, and other offcial items issued by a bank
WHAT THE FDIC DOES NOT COVER
- Stock investments
- Bond investments
- Mutual funds
- Life insurance policies
- Municipal securities
- Safe deposit boxes or their contents
- U.S. Treasury bills, bonds or notes*
*These investments are backed by the full faith and credit of the U.S. government.
The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank. For example, if a person has a certifcate of deposit at Bank A and has a certifcate of deposit at Bank B, the amounts would each be insured separately up to $250,000. Funds deposited in separate branches of the same insured bank are not separately insured.
The FDIC provides separate insurance coverage for funds depositors may have in different categories of legal ownership. The FDIC refers to these different categories as “ownership categories.” This means that a bank customer who has multiple accounts may qualify for more than
$250,000 in insurance coverage if the customer’s funds are deposited in different ownership categories and the requirements for each ownership category are met.
The following are FDIC ownership categories and the requirements a depositor must meet to qualify for insurance coverage above $250,000 at one insured bank.
- Single Accounts
- Certain Retirement Accounts
- Joint Accounts
- Revocable Trust Accounts
- Irrevocable Trust Accounts
- Employee Beneft Plan Accounts
- Corporation/Partnership/ Unincorporated Association Accounts
- Government Accounts
A single account is a deposit owned by one person. This ownership category includes:
- An account held in one person’s name only, provided the owner has not designated any benefciary(ies) who are entitled to receive the funds when the account owner dies
- An account established for one person by an agent, nominee, guardian, custodian, or conservator, including Uniform Transfers to Minors Act accounts, escrow accounts and brokered deposit accounts
- An account held in the name of a business that is a sole proprietorship (for example, a “Doing Business As” or DBA account)
- An account established for or representing a deceased person’s funds—commonly known as a decedent’s estate account
- An account that fails to qualify for separate coverage under another ownership category
If an account title identifes only one owner, but another person has the right to withdraw funds from the account (e.g., as Power of Attorney or custodian), the FDIC will insure the account as a single ownership account.
The FDIC adds together all single accounts owned by the same person at the same bank and insures the total up to $250,000.