How does FDIC insurance work?
When you have your money at an FDIC-insured bank, there’s a built-in layer of security provided. In fact, the Federal Deposit Insurance Corp. has been insuring deposits in covered banks and savings associations since 1933.
There are many misconceptions about how much the FDIC insures. Luckily, there are many resources available online (including the FDIC itself) that can guide you to ways of maximizing your coverage.
The FDIC states that “the standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.” However, when you dig into the details, there’s more to this than meets the eye. Because the FDIC bases that coverage on how the accounts are owned and titled, the FDIC points out there are ways to have more than $250,000 of deposit insurance coverage at one FDIC-insured bank.
If a covered institution fails, the FDIC insures funds in Certificate of Deposit (CD), checking, savings and money market accounts. It also covers other types of accounts, such as IRAs and trust accounts. Read through the resources below from the FDIC for some common coverage scenarios. You can also check out the FDIC Deposit Insurance brochure for details about your specific coverage.