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FDIC Insurance/EDIE FAQs

FDIC/EDIE FAQs

Questions And Answers

What Is the FDIC?

The FDIC – short for the Federal Deposit Insurance Corporation – is an independent agency of the United States government. The FDIC protects you against the loss of your deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government. The term "insured bank" is used on this website to mean any bank or savings association with FDIC insurance.

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Why Is FDIC Insurance Important to You?

All FDIC-insured banks must meet high standards for financial strength and stability. The FDIC, with other federal and state regulatory agencies, regularly reviews the operations of insured banks to ensure these standards are met. Even with these safeguards, some insured banks fail. If your insured bank fails, FDIC insurance will cover your deposits, dollar for dollar, including principal and any accrued interest, up to the insurance limit.

Historically, insured deposits are available to customers of a failed bank within just a few days. Since the start of the FDIC in 1933, no depositor has ever lost a penny of insured deposits.

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What Does the FDIC Insure?

The FDIC insures all deposits at insured banks, including checking, NOW and savings accounts, money market deposit accounts, and certificates of deposit (CDs), up to the insurance limit.

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

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What is the Basic Insurance Amount Is $250,000

The basic insurance amount is $250,000 per depositor per insured bank.

If you and your family have $250,000 or less in all of your deposit accounts at the same insured bank, you do not need to worry about your insurance coverage -- your deposits are fully insured.

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Is there additional coverage over $250,000?

The FDIC provides separate insurance coverage for deposit accounts held in different categories of ownership. You may qualify for more than $250,000 in coverage at one insured bank if you own deposit accounts in different ownership categories.

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Does the FDIC Deposit Insurance Cover Non-Interest-Bearing Deposit Transaction Accounts?

The FDIC will provide full deposit insurance coverage for non-interest bearing deposit transaction accounts, regardless of dollar amount.

As you know, we participated in the Federal Deposit Insurance Corporation’s (FDIC) Transaction Account Guarantee Program (TAGP). That program ended on December 31, 2010.

In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. That law provides for a rule (the Dodd-Frank rule) similar to the TAGP. Under the Dodd-Frank rule, all funds in “noninterest-bearing transaction accounts” will be insured in full by the FDIC from December 31, 2010 through December 31, 2012. An example of a “transaction account” is a traditional checking account.  A subsequent amendment extended full coverage to Interest on Lawyers Trust Accounts (IOLTAs) for the same period.

Importantly, the Dodd-Frank rule is different from the TAGP. With the exception of IOLTAs, the Dodd-Frank rule does not cover any transaction account that may earn interest, such as a NOW account or money market deposit account, even if checks may be drawn on the account. Beginning January 1, 2013, such accounts no longer will be eligible for unlimited protection, but instead will be insured under the general insurance rules up to the Standard Maximum Deposit Insurance Amount of $250,000.

 

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