{"id":6194,"date":"2023-03-22T17:59:05","date_gmt":"2023-03-22T17:59:05","guid":{"rendered":"https:\/\/billlosey.com\/knowledge-center\/?p=6194"},"modified":"2023-03-22T18:00:52","modified_gmt":"2023-03-22T18:00:52","slug":"understanding-fdic-insurance","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/understanding-fdic-insurance\/","title":{"rendered":"Understanding FDIC Insurance"},"content":{"rendered":"\n<p>It&#8217;s natural to wonder exactly how a bank safeguards your money. Fortunately, the Federal Deposit Insurance Corporation (FDIC) insurance exists for this very reason: to help protect your funds once deposited. Read on to explore the purpose of FDIC insurance, how it works, and what it covers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Is FDIC Insurance?<\/h3>\n\n\n\n<p>The FDIC is an independent government agency that helps protect bank depositors from the loss of uninsured deposits at an FDIC-insured bank. This organization oversees FDIC deposit insurance, which provides some protection to bank customers if an FDIC-insured institution fails. In other words, FDIC insures your money at the bank up to certain limits.<\/p>\n\n\n\n<p>A bank failure is an unlikely situation, but it does happen. When this occurs, the FDIC provides depositors with an insurance payout. That can be up to $250,000 per depositor per institution for each account ownership category. When two banks failed in Q1 2023, regulators took steps above and beyond the $250,000 limit to protect deposits.<sup>1,2<\/sup><\/p>\n\n\n\n<p>Remember that if your bank is an FDIC-insured institution, you don&#8217;t need to apply for FDIC insurance because coverage is automatic.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Purpose of FDIC Insurance<\/h3>\n\n\n\n<p>FDIC insurance covers traditional deposit accounts of up to $250,000 per depositor. These traditional deposit accounts include the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Checking accounts<\/li>\n\n\n\n<li>Savings accounts<\/li>\n\n\n\n<li>Certificates of deposit (CDs)<\/li>\n\n\n\n<li>Money market bank deposit accounts<\/li>\n\n\n\n<li>Prepaid cards (assuming they meet all FDIC requirements)<\/li>\n<\/ul>\n\n\n\n<p>Certificates of deposit (CD) are time deposits offered by banks, thrift institutions, and credit unions. They may offer a slightly higher return than a traditional bank savings or checking account, but they may also require a higher deposit amount. If you sell before the CD reaches maturity, you may be subject to penalties.<\/p>\n\n\n\n<p>Bank savings accounts and CDs generally provide a fixed return, whereas the value of money market funds can fluctuate. Money market funds are investment funds that seek to preserve the value of your investment at $1.00 a share. However, it\u2019s possible to lose money by investing in a money market fund.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">FDIC Insurance Limitations<\/h3>\n\n\n\n<p>Now that we understand what FDIC insurance covers let&#8217;s also look at what it doesn&#8217;t cover. The FDIC states that it does not cover the following:<sup>3<\/sup><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Stocks<\/li>\n\n\n\n<li>Bonds<\/li>\n\n\n\n<li>Mutual funds<\/li>\n\n\n\n<li>Life insurance policies<\/li>\n\n\n\n<li>Annuities<\/li>\n\n\n\n<li>Municipal Securities<\/li>\n\n\n\n<li>Safety deposit boxes or their contents<\/li>\n\n\n\n<li>US Treasury bills, bonds, or notes<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">FDIC Insurance and You<\/h3>\n\n\n\n<p>As mentioned above, the FDIC insures up to $250,000 for a single or joint account per depositor; This means that you can have either one account or multiple accounts at the same bank, but only $250,000 may be insured.<\/p>\n\n\n\n<p class=\"has-small-font-size\">1. FDIC.gov, March 1, 2023<br>2. FoxBusiness.com, March 12, 2023<br>3. FDIC.gov, March 1, 2023<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s natural to wonder exactly how a bank safeguards your money. Fortunately, the Federal Deposit Insurance Corporation (FDIC) insurance exists for this very reason: to help protect your funds once deposited. Read on to explore the purpose of FDIC insurance, [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":6064,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-6194","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/6194","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=6194"}],"version-history":[{"count":2,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/6194\/revisions"}],"predecessor-version":[{"id":6197,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/6194\/revisions\/6197"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media\/6064"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=6194"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=6194"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=6194"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}