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FDIC
By Cristina Adams on Wednesday September 16, 2009
The Federal Deposit Insurance Corporation, or FDIC, is an independent U.S. federal government agency responsible for maintaining consumer confidence in the banking system. It does that by insuring your checking and savings account deposits for up to $250,000 per depositor; after January 1, 2014, that number will drop to $100,000 for all accounts, except IRAs and other kinds of retirement accounts. The agency is funded by member banks, which have to meet certain liquidity and reserve requirements. If they don't, they get a warning. If problems continue, the FDIC can force a regime change at the bank or take other action. Created in 1933 following the crash of 1929 and the failure of thousands of banks, the FDIC is responsible these days for protecting nearly $4.5 trillion in bank deposits across the country. But with the recession and government bailout of numerous banks over the past year or so, the FDIC recently revealed that its reserves are at their lowest – just $10.4 billion – since 1993. But don’t stuff your money under the mattress just yet. The agency can always bail itself out by borrowing money from the federal government. Hmmmm.
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The basic insurance amount is $100,000 per depositor, per insured bank.
The $250,000 amount applies to all depositors of an insured bank.
Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank.
Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured.