Banking 101 — FDIC Insurance: Why Your Money is Safe

FDIC: Why Your Money is Safe

Piggy banks are cute, but a bank account is a much safer place to keep your money.

Banks are closely regulated so you can relax and feel confident that the money you place in a bank account is safe and protected.  One thing all legitimate U.S. banks have in common is that they are members of the Federal Deposit Insurance Corporation (FDIC). The FDIC is an independent government agency created to protect depositors in the event a bank fails and can’t refund their customers’ money.

If, for any reason, a bank is unable to reimburse its customers, the FDIC steps in—repaying customer deposits up to certain limits. Since the FDIC was first established 1933, no depositor has ever lost a penny of FDIC-insured funds.

What accounts are insured?

FDIC insurance covers all deposit accounts at insured banks and savings associations. That includes funds deposited in checking, NOW, and savings accounts, money market deposit accounts and certificates of deposit (CDs), up to the insurance limit.

However, the money you invest in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities is NOT insured, even if you purchased these products from an FDIC insured bank.

How much of my money will the FDIC insure?

The government currently insures individual accounts up to $250,000 for money kept at a single institution.

However, if you do have a large amount of money to deposit (maybe you received an inheritance, or an insurance claim payment, or you sold a property), there are ways that money can be kept in one bank and still be fully covered by the FDIC. The FDIC’s Web site offers a helpful tool that calculates your FDIC insurance coverage and tips for making sure your money is fully insured.

It’s also a good idea to talk to your banker or financial planner to develop a strategy to ensure that you’re covered.

How do you know if your bank is insured?

It is important to make sure any bank where you deposit your money is a Member of the FDIC. Insured institutions must display an official sign showing they are covered by FDIC. Look for the familiar FDIC logo or the words "Member FDIC" or "FDIC Insured" on the window of the bank, on the glass at each teller’s window and on the bank’s Web site.

You can also double-check using an FDIC’s online database of FDIC-insured institutions. To search for a specific bank, go to the FDIC’s “Bank Find” database

Additional Reading

This site is for education purposes. The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the availability or suitability of any Capital One product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional.