The Federal Deposit Insurance Corporation (FDIC) was created by the Banking Act of 1933. It is an independent agency of the United States government. FDIC insurance guarantees the safety of deposits placed at each insured bank up to $250,000 per depositor, for each account ownership capacity. Deposit accounts that are covered by FDIC insurance include checking accounts, savings accounts, money market deposit accounts, and certificates of deposit. In the event that one of the FDIC member banks fail, a customer’s insured deposits are protected. No one has ever lost a penny of FDIC-insured funds.
When a customer’s deposit exceeds the FDIC insurance maximum, the customer has a number of options, including:
- Keeping the excess deposits at the customer's bank as uninsured
- Using collateral to protect the deposits
- Managing relationships at multiple banks and receiving multiple statements (for example, a customer that has $5 million to deposit could have to manage more than 20 bank relationships in order to keep the funds insured)
- Setting up multiple titled accounts that are all eligible for FDIC insurance
- Using ICS®, the Insured Cash Sweep® service, and/or CDARS®, the Certificate of Deposit Account Registry Service®, to access multi-million-dollar FDIC insurance, all through one bank relationship
ICS and CDARS are smart, convenient ways to safeguard your large deposits.