Below are answers to some of the most common questions about the
FDIC and deposit insurance. If you have questions that are not
addressed here, please visit the FDIC Information and Support Center to submit a request for deposit insurance coverage information
or call 1-877-ASK-FDIC (1-877-275-3342).
Q: What is the FDIC?
A: The FDIC (Federal Deposit Insurance
Corporation) is an independent agency of the United States
government that protects bank depositors against the loss of
their insured deposits in the event that an FDIC-insured bank
or savings association fails. FDIC insurance is backed by the
full faith and credit of the United States government.
Q: What is deposit insurance?
A: FDIC deposit insurance protects bank
customers in the event that an FDIC-insured depository
institution fails. Bank customers don’t need to purchase
deposit insurance; it is automatic for any deposit account
opened at an FDIC-insured bank. Deposits are insured up to at
least $250,000 per depositor, per FDIC-insured bank, per
ownership category.
Deposit insurance is calculated dollar-for-dollar, principal
plus any interest accrued or due to the depositor, through the
date of default. For example, if a customer had a CD account
in her name alone with a principal balance of $195,000 and
$3,000 in accrued interest, the full $198,000 would be
insured.
Q: What happens when a bank fails?
A: In the unlikely event of a bank failure,
the FDIC responds in two capacities.
First, as the insurer of the bank’s deposits, the FDIC pays insurance to depositors up to the insurance
limit. Historically, the FDIC pays insurance within a few days
after a bank closing, usually the next business day, by either
1) providing each depositor with a new account at another
insured bank in an amount equal to the insured balance of
their account at the failed bank, or 2) issuing a check to
each depositor for the insured balance of their account at the
failed bank.
In some cases—for example, deposits that exceed $250,000
and are linked to trust documents or deposits established by a
third-party broker—the FDIC may need additional time to
determine the amount of deposit insurance coverage and may
request supplemental information from the depositor in order
to complete the insurance determination.
Second, as the receiver of the failed bank, the FDIC assumes the task of selling/collecting the assets
of the failed bank and settling its debts, including claims
for deposits in excess of the insured limit. If a depositor
has uninsured funds (i.e., funds above the insured limit),
they may recover some portion of their uninsured funds from
the proceeds from the sale of failed bank assets. However, it
can take several years to sell off the assets of a failed
bank. As assets are sold, depositors who had uninsured funds
usually receive periodic payments (on a pro-rata “cents on the
dollar” basis) on their remaining claim.
Q: How can I get deposit insurance?
A: Depositors do not need to apply for or
purchase FDIC deposit insurance. Coverage is automatic
whenever a deposit account is opened at an FDIC-insured bank.
If you want your funds insured by the FDIC, simply place your
funds in a deposit account at an FDIC-insured bank and make
sure that your deposit does not exceed the insurance limit for
that ownership category. See “Are My Accounts Insured by the FDIC?” for more information about the types of insurable products
that are covered by FDIC insurance and the amount of deposit
insurance coverage that may be available under FDIC’s
different ownership rights and capacities.
Q: How do I find out if a bank is FDIC-insured?
A: To determine if a bank is FDIC-insured,
you can ask a bank representative, look for the FDIC sign at
your bank, or you can use the FDIC’s BankFind tool. BankFind allows you to access detailed information about
all FDIC-insured institutions, including branch locations, the
bank’s official website, the current operating status of your
bank, and the regulator to contact for additional information
and assistance. You can also submit a request using the FDIC Information and Support Center or call 1-877-275-3342.
Q: How much deposit insurance coverage do I qualify
for?
A: The standard deposit insurance amount is
$250,000 per depositor, per FDIC-insured bank, per ownership
category.
See “Are My Accounts Insured by the FDIC?” for more information about the types of insurable deposit
products that are covered by FDIC insurance and the amount of
deposit insurance coverage that may be available under FDIC’s
different ownership categories. Your Insured Deposits includes even more comprehensive information about deposit
insurance coverage, and provides examples of deposit insurance
coverage for various ownership categories.
To calculate your specific deposit insurance coverage, you can
use the FDIC’s Electronic Deposit Insurance Estimator (EDIE).
Q: Is every financial product at a bank covered by the
FDIC?
A: No. FDIC deposit insurance only covers
certain deposit products, such as checking and savings
accounts, money market deposit accounts (MMDAs), and
certificates of deposit (CDs). See “Are My Accounts Insured by the FDIC?” for a full list of the types of deposit products that are
covered by FDIC insurance and the amount of deposit insurance
coverage that may be available under FDIC’s different
ownership categories.
Investment products that are not deposits, such as mutual
funds, annuities, life insurance policies and stocks and
bonds, are not covered by FDIC deposit insurance. See “Financial Products that Are Not Insured by the FDIC” for more information about uninsured financial products.
Q: What is the difference between “deposit products and
“ownership categories”?
A: Deposit products include checking
accounts, savings accounts, CDs and MMDAs and are insured by
the FDIC. The amount of FDIC insurance coverage you may be
entitled to, depends on the ownership category. This generally
means the manner in which you hold your funds. Some examples
of FDIC ownership categories, include single accounts, certain
retirement accounts, employee benefit plan accounts, joint
accounts, trust accounts, business accounts as well as
government accounts.
Q: Can I have more than $250,000 of deposit insurance
coverage at one FDIC-insured bank?
A: Yes. The FDIC insures deposits according
to the ownership category in which the funds are insured and
how the accounts are titled. The standard deposit insurance
coverage limit is $250,000 per depositor, per FDIC-insured
bank, per ownership category.
Deposits held in different ownership categories are separately
insured, up to at least $250,000, even if held at the same
bank. For example, a revocable trust account (including living
trusts and informal revocable trusts commonly referred to as
payable on death (POD) accounts) with one owner naming three
unique beneficiaries can be insured up to $750,000. See “Revocable and Irrevocable Trust Accounts” for more information about how deposit insurance is calculated
for these types of accounts.
See “Are My Accounts Insured by the FDIC?” for more information about the types of deposit products that
are covered by FDIC insurance and the amount of deposit
insurance coverage that may be available under FDIC’s
different ownership categories.
Q: How Does the FDIC Insure Prepaid Cards?
A: Prepaid cards that are registered with the
card issuer are insured when certain FDIC requirements are
met. The funds underlying the prepaid cards must be deposited
in a bank. Please remember that FDIC deposit insurance
coverage only applies when a bank fails. Deposit insurance
coverage does not apply to lost or stolen prepaid cards or if
the prepaid card provider declares bankruptcy.
Q: Can I check to see if my accounts are fully covered?
A: Yes. You can get detailed information about your specific deposit insurance coverage by accessing the FDIC’s Electronic Deposit Insurance Estimator(EDIE) and entering information about your accounts. You can also visit the FDIC Information and Support Center to submit a request for deposit insurance coverage information or you can also call the FDIC at 1-877-ASK-FDIC (1-877-275-3342) and an FDIC deposit insurance specialist will help you calculate your deposit insurance coverage.
