FDIC
FDIC stands for the Federal Deposit Insurance Corporation. It is a United States government agency that provides deposit insurance to depositors in U.S. commercial banks and savings institutions. The primary purpose of the FDIC is to maintain public confidence in the financial system by protecting depositors against bank failures.
The FDIC insures deposits up to a limit of $250,000 per depositor, per insured bank, for each account ownership category. This insurance coverage includes checking accounts, savings accounts, and certificates of deposit (CDs).
Examples of FDIC coverage include:
- A single depositor with a checking account and a Savings Account at the same bank, both totaling $200,000, would be fully insured.
- A married couple with joint accounts totaling $500,000 at the same bank would be insured for $500,000, as joint accounts are insured separately from individual accounts.
Cases of FDIC intervention include:
- In 2008, during the financial crisis, the FDIC intervened to protect depositors when several banks failed, ensuring that insured deposits were safe.
- In 2010, the FDIC facilitated the acquisition of a failed bank, ensuring that customers could access their insured deposits without disruption.