What Does the Federal Deposit Insurance Corporation (FDIC) Do?
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that insures deposits in commercial banks and savings institutions. The FDIC was created by the Banking Act of 1933 in response to the Great Depression, when many banks failed and people lost their savings. The FDIC's mission is to "maintain stability and public confidence in the nation's financial system."
The FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category. This means that if a bank fails, the FDIC will cover up to $250,000 of your money. The FDIC also provides a number of other services to banks, including:
- Examinations and supervision: The FDIC examines banks to ensure that they are safe and sound. The FDIC also supervises banks to make sure they are following the law and complying with regulations.
- Liquidation and receivership: If a bank fails, the FDIC will take steps to liquidate the bank's assets and return the money to depositors. The FDIC also appoints a receiver to oversee the bank's affairs.
- Research and education: The FDIC conducts research on the banking industry and provides educational materials to consumers and bankers.
The FDIC is funded by assessments on banks. The FDIC's insurance fund is one of the strongest in the world, and it has never paid out more than it has collected in premiums. The FDIC's mission is to protect the financial security of depositors and to promote a sound and stable banking system. The FDIC has been successful in achieving these goals, and it has played a vital role in the stability of the U.S. financial system.
Here are some additional things to know about the FDIC:
- The FDIC is not a bank. It is an independent agency of the U.S. government.
- The FDIC does not insure investments, such as stocks, bonds, or mutual funds.
- The FDIC does not insure money market funds. However, many money market funds are insured by the Securities Investor Protection Corporation (SIPC).
- The FDIC does not insure credit union deposits. Credit union deposits are insured by the National Credit Union Administration (NCUA).
Conclusion
The FDIC is an important part of the U.S. financial system. It helps to protect depositors and promote a sound and stable banking system. If you have any questions about the FDIC, you can visit its website or call 1-800-934-3342.