Understanding FDIC Insurance
If you’ve ever opened a savings or checking account, you’ve likely been notified that the account is FDIC-insured. But what exactly does that mean for customers, and how does the Federal Deposit Insurance Corporation (FDIC) help protect your money? Our team at Legacy Bank serves customers across the state, with physical locations in Wichita, Colwich, Pratt, and Sedgwick, Kansas, and is dedicated to ensuring our customers are covered. Learn more about FDIC insurance and find out how it affects you and your money!
What Is FDIC Insurance?
The Federal Deposit Insurance Corporation (FDIC) is an independent government agency responsible for insuring deposits for U.S. member banks. Not only is FDIC insurance designed to protect depositors in the case of a bank failure, but it is one of the most reliable ways to safeguard your savings. The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category, and consumers don’t have to take any action to receive this coverage. Your money is automatically covered as long as you have deposits at an FDIC member bank.
How Does FDIC Insurance Work?
FDIC insurance works by protecting depositors’ funds in case a bank fails. If a bank fails, the FDIC takes over the bank’s assets and liabilities, including deposit accounts. The FDIC will then pay out the insured deposits to depositors, up to the insured limit of $250,000 per depositor, per insured bank, for each account ownership category. Consequentially, if you have more than $250,000 in a single account or multiple accounts at the same bank, only $250,000 will be insured. View the FDIC’s Electronic Deposit Insurance Estimator to learn more.
Is My Money Protected?
FDIC insurance covers most types of deposit accounts, including checking accounts, savings accounts, money market deposit accounts, certificates of deposit (CDs), self-directed retirement accounts, and more. However, it does not cover investments such as stocks, bonds, mutual funds, or other financial products such as annuities. For a comprehensive list of accounts covered by the FDIC, visit their website today!
While most Americans have less than the $250,000 limit stored in a singular deposit account, it’s important to understand the FDIC’s specific coverage limits and how you can diversify your money across different accounts or banks to ensure you are completely protected. At Legacy Bank, we encourage you to visit with one of our team members at a branch nearest you to discuss your options and find a solution that works best for you and your family!
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