Consumers And FDIC Insurance
One of the biggest concerns for consumers and clients who use banks should be whether their banks are insured by the FDIC or the Federal Deposit Insurance Corp. This is especially true nowadays when the financial landscape is much more risky than usual owing to the effects of this economic crisis pervading in the country.
The Federal Deposit Insurance Corp. is actually an independent agency of the United States government. Their purpose is to protect consumers from losing money stored in their checking account, savings account and other qualified deposits should their banks ever fail. However, in order for consumers to be able to collect insured deposits in the case of a bank failure, a bank must be insured by the FDIC at the time of its failure. It is thus, very important for consumers to ensure that a bank that they are using is actually FDIC insured.
One of the important things that consumers also need to know when looking for FDIC insurance is what type of accounts FDIC insurance is applicable to. Basically, FDIC insurance covers several types of deposits at insured banks. This includes savings accounts, checking accounts, certificate deposits and money market accounts. Accounts that FDIC insurance do not cover are annuities, life insurance policies, stocks, bonds, mutual funds and deposits in safe deposit boxes or the contents therein.
As long as a consumer uses an account that is insured by the FDIC and the bank that he or she is using is actually FDIC insured, then a consumer can rest easy in the fact that his or her deposits are safe even if the bank should fail. As FDIC puts it, no depositor insured by the FDIC has ever lost their money since the FDIC was first created in the year 1934.
FDIC insured accounts have a limit of coverage, however. Up to December 31, 2013, the highest covered depositor amount is $250,000 for every depositor. After December 31, the standard insurance amount will once again amount to $100,000 per depositor. This includes all types of accounts except for a number of retirement accounts and IRA’s.
Finding out whether their banks and their accounts are covered by the FDIC should be a priority for consumers with bank deposits. The shaky state of this economy makes this even more important now. The FDIC offers tools for consumers to find out if their banks are insured. They also have their EDIE estimator which consumers can use to see if their accounts are within coverage limits set by the FDIC.
