FDIC Coverage

Your FDIC Coverage

You've seen it and heard it in countless ads from banks (Amboy included): Member FDIC. Did you ever wonder what that actually means to consumers and businesses?

What Is It?

FDIC is an acronym for Federal Deposit Insurance Corporation. It was established in 1933 in response to a number of bank failures in which depositors lost their savings. The FDIC has a number of mandates:
  • Insuring deposits
  • Examining and supervising financial institutions for safety and soundness and consumer protection
  • Making large and complex financial institutions resolvable
  • Managing receiverships if banks fail

Why Is FDIC Important?

Our lives are intertwined with the economy, and banks are a very important part of the economic ecosystem. The FDIC gives the assurance that banks are safe places worthy of holding your money. This is especailly important in times of crisis, such as a natural disaster, pandemic, or financial turmoil. Specifically, here is how the FDIC positively affects everyone:
  • Because banks are examined by FDIC and/or other regulatory bodies, depositors can rest assured that your bank's procedures, policies, and practices are scrutinized by non-partisan, trained professionals 
  • Because FDIC insures the deposits in those banks, consumers and businesses know they have coverage even if the bank fails. Banks then use those deposits to lend to people who buy homes and to businesses that provide goods, services, and jobs
  • Because much of the deposits are backed by the U.S. government, panics and "runs" on banks have little reason to occur

What Accounts Are Insured?

The FDIC automatically covers:
  • Checking accounts
  • Savings accounts
  • Money Market Deposit Accounts
  • Time deposits such as certifcates of deposit (CDs)
  • Cashier’s checks, money orders, and other offcial items issued by a bank
Even if you purchase them at a bank, FDIC does NOT cover:
  • Stock investments
  • Bond investments
  • Mutual funds
  • Life insurance policies
  • Annuities
  • Municipal securities
  • Safe deposit boxes or their contents
  • U.S. Treasury bills, bonds or notes

For How Much Are Deposits Insured?

The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC provides separate coverage for deposits held in different account ownership categories. Depositors may qualify for coverage over $250,000 if they have funds in different ownership categories and all FDIC requirements are met. All deposits that an accountholder has in the same ownership category at the same bank are added together and insured up to the standard insurance amount.

For coverage amounts that pertain to your specific situation, use the FDIC's Estimator. This chart shows coverage for the most common types of accounts and ownership with their typical coverage: 

Typical FDIC Coverage
Account/Ownership Type Coverage
Single Accounts (owned by one person) $250,000
Joint Accounts (owned by two or more people) $250,000 per co-owner
IRAs and Certain Other Retirement Accounts $250,000 per owner
Trust Accounts $250,000 per owner per beneficiary subject to specific limitations and requirements
Corporation, Partnership, and Unincorporated Association Accounts $250,000 per corporation, partnership or unincorporated associaton
Employee Benefit Plan Accounts $250,000 for the non-contingent, ascertainable
interest of each participant
Government Accounts $250,000 per official custodian