History

• The Federal Deposit Insurance Corporation, or FDIC, is an independent government agency that was created when President Roosevelt signed the Banking Act of 1933, also commonly known as the Glass-Steagall Act. In an effort to head off the landslide of collapsing banks across the country, the Banking Act of 1933 implemented new legislation regarding proper handling of customer deposits and created the FDIC to insure those funds. Since enactment of this legislation, no bank customer has lost money that was protected by the FDIC.
  
  

Purpose

• The function of the FDIC is to insure the money in your bank accounts. If the institution in which you deposited your money ever became insolvent or went bankrupt, the FDIC would reimburse you the sum total of your deposits in covered accounts. This insurance is backed by the United States government, and you are in no danger of losing money simply because your bank fails.
  
  

Account Types

• FDIC coverage protects several account types from a bank failure and guarantees that your deposits will not be lost. Types of insured deposits are those within individual accounts, joint accounts, retirement accounts, revocable and irrevocable trusts, corporate accounts, employee benefit plans and government accounts. Only those deposits held in an FDIC insured account type with an eligible banking institution are protected. Money deposited into mutual funds, stocks, life insurance, or annuities is not covered by the FDIC and therefore will not be reimbursed by the agency if the financial institution fails.
  
  

Coverage Limits

• Money you have deposited in an FDIC-covered account is currently protected up to a maximum of $250,000. This amount is the most the FDIC will reimburse each owner if your bank fails. If you have an individual account, your entire balance is insured up to the limit. If you are the co-owner of a joint account, your deposits and those of your co-owner are covered up to the same limit, meaning that both of you will be reimbursed up to $250,000 apiece.
  
  

Temporary Status

• The $250,000 FDIC coverage limit is only temporary. Unless there are extensions of this provision or formal permanent legislation is passed, the FDIC maximum insurance for most covered account types will decrease to $100,000 at the end of 2013. Only certain types of retirement accounts, like IRA's, will remain insured up to $250,000.