FDIC Insurance 2025: Coverage Limits & What You Need to Know About Federal Deposit Insurance

Julia Kagan is a financial and consumer journalist with extensive expertise in personal finance and banking.

What Is the Federal Deposit Insurance Corporation (FDIC)?

The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency established in 1933 to protect depositors and maintain trust in the nation's banking system. It provides deposit insurance to U.S. banks and savings institutions, ensuring that customers’ deposits are safe in the event of a bank failure.

As of 2024, the FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. It’s essential to verify that your bank is FDIC-insured to benefit from this protection.

Key Points to Remember

• The FDIC is an independent federal agency that insures deposits at U.S. banks and thrifts.
• Deposit insurance coverage is up to $250,000 per depositor, per bank, for each account category.
• Covered accounts include checking, savings, money market accounts, certificates of deposit (CDs), IRAs, and certain trust and employee benefit accounts.
• Investment products like mutual funds, stocks, bonds, annuities, and life insurance policies are not insured by the FDIC.

The FDIC was created to prevent bank runs, a phenomenon during the Great Depression when panicked customers rushed to withdraw their funds, causing bank collapses. With FDIC insurance, depositors have peace of mind knowing their money is secure up to insured limits.

How FDIC Insurance Works

Nearly all U.S. banks and savings institutions are FDIC members, which reduces consumer uncertainty. If a bank fails, the FDIC steps in to reimburse depositors up to the insured limit, helping maintain financial stability.

Insurance coverage is calculated per depositor, per bank, and per account ownership category. This means spreading large deposits across different banks or account types can maximize your insurance protection.

Example 1:

If you hold $200,000 in a savings account and $100,000 in a CD at the same bank, $50,000 of your funds exceed the FDIC insurance limit and remain uninsured.

Example 2:

A married couple with $500,000 in a joint account and $250,000 in an eligible retirement account would have full FDIC coverage for the entire $750,000, as joint accounts and retirement accounts are insured separately.

The FDIC offers an interactive tool online to help depositors determine their coverage status.

Accounts Covered by FDIC Insurance

FDIC insurance protects a variety of deposit accounts including checking, savings, money market deposit accounts, CDs, individual retirement accounts (IRAs), joint accounts, revocable and irrevocable trust accounts, and employee benefit plan accounts. Business accounts for corporations, partnerships, LLCs, and unincorporated associations are also insured.

Important:

If your deposits exceed $250,000 in a single account type at one bank, consider diversifying across multiple institutions to ensure full coverage.

Note that FDIC insurance does not cover investment products such as mutual funds, annuities, stocks, bonds, life insurance policies, or the contents of safe deposit boxes. However, cashier’s checks and money orders issued by a failed bank remain fully insured.

How to File an FDIC Claim

If your bank fails, you can file a claim with the FDIC as early as the next business day. Claims can be submitted online via the FDIC website or by calling 1-877-ASKFDIC (1-877-275-3342) for free assistance.

Keep in mind, the FDIC only insures against bank failures and does not cover losses due to fraud, theft, or identity theft—those issues are handled directly by the bank.

Additional Considerations

While the FDIC covers banks and savings institutions, deposits at credit unions are insured by the National Credit Union Share Insurance Fund (NCUSIF), which also protects accounts up to $250,000 per depositor.

Understanding FDIC: Summary

The Federal Deposit Insurance Corporation safeguards your deposits in U.S. banks up to $250,000 per depositor, per bank, per account category. Established during the Great Depression, the FDIC plays a vital role in maintaining consumer confidence and financial system stability. Before opening an account, always verify that your bank is FDIC-insured to ensure your money is protected.

Discover the latest news and current events in Banking as of 19-03-2023. The article titled " FDIC Insurance 2025: Coverage Limits & What You Need to Know About Federal Deposit Insurance " provides you with the most relevant and reliable information in the Banking field. Each news piece is thoroughly analyzed to deliver valuable insights to our readers.

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