What Does FDIC Stand For?

6 Min Read | Published: April 12, 2024

Image of the Federal Reserve Bank of New York, a key institution in the U.S. financial system, overseeing monetary policy.

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The Federal Deposit Insurance Corporation (FDIC) insures consumer deposits in member banks in case they fail. Learn how to check if your deposits are protected.

At-A-Glance

The Federal Deposit Insurance Corporation (FDIC) protects deposits in member banks.
In case of bank failure, the FDIC will act quickly to help ensure that access to funds is not interrupted.
The FDIC covers up to $250,000 per depositor, per account ownership type, per financial institution at FDIC-insured banks.

The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency, overseeing the banking industry. One of the FDIC’s primary duties is insuring deposits at FDIC-insured U.S. banks, in case they fail.¹

What Is FDIC Insurance?

The FDIC is funded by premiums from financial institutions that pay for deposit insurance coverage. The standard insurance amount is $250,000 per depositor, per account ownership type, per financial institution.² This insurance is automatic, and you do not need to do anything to enroll, as long as the financial institution you are banking with is FDIC-insured.

How Does the FDIC Work?

The FDIC maintains the Deposit Insurance Fund (DIF), which is backed by the full faith and credit of the U.S. government.³ It’s also worth noting that since the FDIC was founded in 1933, no depositor has lost any FDIC-insured funds.⁴

While bank failures are unlikely, they can happen. FDIC deposit insurance protects insured deposits if a bank does close. Should this happen, the FDIC will act quickly to ensure that access to insured deposits is not interrupted.⁵

Which Accounts Can Be FDIC-Insured?

The FDIC insures deposit accounts at member banks.⁶ Types of accounts that can be covered include the following:

Checking accounts
Savings accounts
Certificate of deposit (CD) accounts
Money market deposit accounts

Did you know?

You can check to see if your bank is insured by using the BankFind Suite search tool on the FDIC’s website.

Do Investment Accounts Have FDIC Insurance?

FDIC insurance does not cover various non-deposit investment products, such as stocks, bonds, mutual funds, and life insurance policies. However, the Securities Investors Protection Corporation (SIPC) can replace missing stocks and other securities in customer accounts held by its members, up to $500,000 (including up to $250,000 in cash) should a member brokerage or bank brokerage subsidiary fails.⁷

The Takeaway

Bank failures are not especially common, but they can occur. For this reason, it’s wise to ensure that the financial institution that you’re banking with is FDIC-insured.

^1,2,6 “What Is The FDIC? 4 Key Facts You Need to Know,” Forbes

^3,4,5 “Understanding Deposit Insurance,” Federal Deposit Insurance Corporation (FDIC)

⁷ “Financial Products That Are Not Insured by the FDIC,” FDIC

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Bradley Schnitzer is a writer and email strategist who has covered personal finance and small business topics for over five years. He is passionate about personal finance and helping others understand their money.

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.

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