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What We Do
What We Do
Last Updated: May 15, 2020
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What We Do
The mission of the Federal Deposit Insurance Corporation (FDIC) is to maintain stability and public confidence in the nation's financial system. In support of this goal, the FDIC:
Examines and supervises financial institutions for safety and soundness and consumer protection,
Works to make large and complex financial institutions resolvable, and
An independent agency of the federal government, the FDIC was created in 1933 in response to the thousands of bank failures that occurred in the 1920s and early 1930s. Learn more about the history of the FDIC.
The FDIC receives no Congressional appropriations - it is funded by premiums that banks and savings associations pay for deposit insurance coverage. The FDIC insures trillions of dollars of deposits in U.S. banks and thrifts - deposits in virtually every bank and savings association in the country.
The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. Since the start of FDIC insurance on January 1, 1934, no depositor has lost a penny of insured funds as a result of a failure. The FDIC's Electronic Deposit Insurance Estimator can help you determine if you have adequate deposit insurance for your accounts. The FDIC insures deposits only. It does not insure securities, mutual funds, or similar types of investments that banks and thrift institutions may offer. Learn more about deposit insurance.
Supervision & Examination
The FDIC directly supervises and examines more than 5,000 banks and savings associations for operational safety and soundness. Banks can be chartered by the states or by the Office of the Comptroller of the Currency. Banks chartered by states also have the choice of whether to join the Federal Reserve System. The FDIC is the primary federal regulator of banks that are chartered by the states that do not join the Federal Reserve System. In addition, the FDIC is the back-up supervisor for the remaining insured banks and savings associations.
The FDIC also examines banks for compliance with consumer protection laws, including the Fair Credit Billing Act, the Fair Credit Reporting Act, the Truth in Lending Act, and the Fair Debt Collection Practices Act, to name a few. Finally, the FDIC examines banks for compliance with the Community Reinvestment Act, which requires banks to help meet the credit needs of the communities they were chartered to serve.
To protect insured depositors, the FDIC responds immediately when a bank or savings association fails. Institutions generally are closed by their chartering authority - the state regulator or the Office of the Comptroller of the Currency. The FDIC has several options for resolving institution failures, but the most common is to sell the deposits and loans of the failed institution to another institution. Customers of the failed institution automatically become customers of the assuming institution. Most of the time, the transition is seamless from the customer's point of view.
Where We Are
The FDIC is headquartered in Washington, DC, and has established regional and field offices around the country.
Who We Are
The FDIC is managed by a five-person Board of Directors that includes the Comptroller of the Currency and the Director of the Consumer Financial Protection Bureau, all of whom are appointed by the President and confirmed by the Senate, with no more than three being from the same political party.
For more information about the FDIC’s mission and operations, please be sure to browse the additional information offered in the About section of this website.
Thank you for your interest in the FDIC.
Federal Deposit Insurance Corporation (FDIC), independent U.S. government corporation created under authority of the Banking Act of 1933 (also known as the Glass-Steagall Act), with the responsibility to insure bank deposits in eligible banks against loss in the event of a bank failure and to regulate certain banking practices. It was established after the collapse of many American banks during the initial years of the Great Depression. Although earlier state-sponsored plans to insure depositors had not succeeded, the FDIC became a permanent government agency through the Banking Act of 1935. The FDIC’s income is derived from assessments on insured banks
By The Editors of Encyclopaedia Britannica • Edit History
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Related Topics: bank deposit
See all related content →deposit insurance, special type of insurance, under which depositors are guaranteed against loss in the event of a bank failure. It was developed in the United States during the Great Depression of the 1930s to meet the serious problems created by frequent bank suspensions.
Between 1863 and 1933, more than 17,000 U.S. banks closed their doors, and depositors suffered heavy losses. Even in the prosperous years from 1921 to 1929, 5,411 banks closed, and during the next four years the Depression caused the failure of 8,812 more, with losses to depositors of more than $5 billion. Some states had set up plans to insure depositors against loss as early as 1829, but none proved fully successful. Congress rejected many proposals to place deposit insurance on a national basis until the disastrous collapse of the banking system in 1932 made action to protect depositors imperative.
Panic of 1857
Illustration depicting a run on the Seamen's Bank during the Panic of 1857.
Library of Congress, Washington, D.C.
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bank: Deposit insurance
Most countries require banks to participate in a federal insurance program intended to protect bank deposit holders from losses that could...
The federal insurance program came into being in 1933 with the creation of the Federal Deposit Insurance Corporation (FDIC) with authority to insure bank deposits in eligible banks up to a maximum of $2,500 for each depositor (later raised to $5,000 in 1934; to $10,000 in 1950; to $15,000 in 1966; to $20,000 in 1969; to $40,000 in 1974; to $100,000 in 1980; and to $250,000 in 2008) and to regulate certain banking practices. Costs of the FDIC were to be met out of regular premium payments by insured banks. All members of the Federal Reserve System were required to insure their deposits, while nonmember banks were permitted to do so if they met FDIC standards. The plan proved so attractive that within a few years over 90% of the deposits in commercial banks and a majority of those in mutual savings banks were insured. The deposit insurance principle was also adopted by federally chartered savings and loan associations, although these organizations were insured by the Federal Savings and Loan Insurance Corporation (FSLIC). After the collapse of the savings and loan industry in the 1980s, the FSLIC was dissolved, and responsibility for insuring savings and loan deposits was transferred to the FDIC.
Federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation building in Arlington, Virginia.
The FDIC was able to eliminate losses to depositors in suspended banks almost completely and—perhaps more important—to prevent the failure of many banks which encountered difficulties. Deposit insurance and other banking reforms in the Banking Acts of 1933 and 1935 made insured deposits in participating institutions virtually as safe as any direct obligation of the federal government.
This article was most recently revised and updated by Michael Ray.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that provides insurance to U.S. banks and thrifts.
PERSONAL FINANCE BANKING
Federal Deposit Insurance Corporation (FDIC)
By JULIA KAGAN Updated May 05, 2020
Reviewed by SOMER ANDERSON
What Is the Federal Deposit Insurance Corporation (FDIC)?
The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures. The FDIC was created in 1933 to maintain public confidence and encourage stability in the financial system through the promotion of sound banking practices. As of 2020, the FDIC insures deposits up to $250,000 per depositor as long as the institution is a member firm. It is critical for consumers to confirm if their institution is FDIC insured.
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Federal Deposit Insurance Corporation (FDIC)
The primary purpose of the FDIC is to prevent "run on the bank" scenarios, which devastated many banks during the Great Depression. For example, with the threat of the closure of a bank, small groups of worried customers rushed to withdraw their money.
After fears spread, a stampede of customers, seeking to do the same, ultimately resulted in banks being unable to support withdrawal requests. Those who were first to withdraw their money from a troubled bank would benefit, whereas those who waited risked losing their savings overnight. Before the FDIC, there was no guarantee for the safety of deposits beyond the confidence in the bank's stability.
Understanding the FDIC
Because practically all banks and thrifts now offer FDIC coverage, many consumers face less uncertainty regarding their deposits. As a result, banks have a better opportunity to address problems under controlled circumstances without triggering a run on the bank.
In case of bank failure, the FDIC covers deposits up to $250,000, per FDIC-insured bank, for each account ownership category such as retirement accounts and trusts. This sum is adequate for the majority of depositors, though depositors with more than that sum should spread their assets among multiple banks.
The Federal Deposit Insurance Corporation is an independent federal agency insuring deposits in U.S. banks and thrifts in the event of bank failures.
As of 2020, the FDIC insures deposits up to $250,000 per depositor as long as the institution is a member firm.
The FDIC covers checking and savings accounts, CDs, money market accounts, IRAs, revocable and irrevocable trust accounts, and employee benefit plans.
Mutual funds, annuities, life insurance policies, stocks, and bonds are not covered by the FDIC.
If you have $200,000 in a savings account and $100,000 in a certificate of deposit (CD), you have $50,000 uninsured.
If a couple has $500,000 in a joint account, as well as $250,000 in an eligible retirement account, the entire $750,000 would be covered by the FDIC, as each co-owner's share in the joint account is covered, and the retirement account is a different account category.
The FDIC provides a helpful interactive tool to check whether assets are covered.
If you have more than $250,000 deposited in an account type with a single bank, you may need to spread your assets among multiple banks to ensure you are fully covered by the FDIC.
What the FDIC Covers
Checking accounts, savings accounts, CDs, and money market accounts are generally 100% covered by the FDIC. Coverage extends to individual retirement accounts (IRAs), but only the parts that fit the type of accounts listed previously. Joint accounts, revocable and irrevocable trust accounts, and employee benefit plans are covered, as are corporate, partnership, and unincorporated association accounts.
FDIC insurance does not cover products such as mutual funds, annuities, life insurance policies, stocks, or bonds. The contents of safe-deposit boxes are also not included in FDIC coverage. Cashier's checks and money orders issued by the failed bank remain fully covered by the FDIC.
Eligible business accounts from a corporation, partnership, LLC, or unincorporated organization at a bank are also FDIC-covered.
Filing a Claim
A customer can file a claim with the FDIC as early as the day after a bank or thrift folds. The request can be submitted online through the FDIC website. By calling 877-275-3342 (1-877-ASKFDIC), bank customers can receive personalized assistance at no cost.
Note that the FDIC only insures against bank failures. Instances of fraud, theft, and similar loss are handled directly by the institution. The FDIC has no jurisdiction over identity theft.
While banks are covered by the FDIC, deposits into credit unions are backstopped by the National Credit Union Share Insurance Fund (NCUSIF). And as of 1981, the state of Massachusetts has had its own insurer for state-chartered savings banks, the Depositors Insurance Fund (DIF), which insures any deposits that exceed the FDIC limit.
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