FDIC Insurance
Definition
FDIC Insurance is a federal government program that protects depositors against the loss of their deposits at FDIC-insured banks and savings associations, up to $250,000 per depositor, per insured bank.
Explanation
The Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency that provides deposit insurance to protect consumers. If an FDIC-insured bank fails, the FDIC reimburses depositors up to $250,000 per depositor, per ownership category, per insured bank. This means if you have $250,000 in a checking account and the same bank fails, you are fully covered.
FDIC insurance covers checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs). It does not cover investment products like stocks, bonds, mutual funds, or cryptocurrency. Nearly all banks in the U.S. carry FDIC insurance, giving consumers confidence that their money is safe even if the bank fails.
For business accounts, the same $250,000 limit applies per business. Businesses with large deposits may need to distribute funds across multiple banks to remain fully insured.
Example
If your business checking account has $200,000 at an FDIC-insured bank and that bank fails, the FDIC will reimburse the full $200,000. But if the account had $300,000, only $250,000 would be covered.