It used to be that banks were considered safe places to put your money, and we never paid attention to the FDIC insurance signs in front of each teller.

But today you had better be certain that your savings, money markets, certificates of deposit and other assets are backed by the FDIC.

What is the FDIC?

The Federal Deposit Insurance Agency (FDIC) is an independent agency of the U.S. government that protects or insures depositors from losses if a bank fails. Deposits at FDIC-insured institutions are insured up to at least $250,000 per depositor until December 31, 2009. On January 1, 2010, FDIC deposit insurance for all deposit accounts-except for certain retirement accounts-will return to at least $100,000 per depositor. Insurance coverage for certain retirement accounts, which include all IRA deposit accounts, was increased permanently to $250,000 per depositor in 2006.

What is covered by FDIC insurance?

The FDIC insures most traditional types of bank accounts – checking, savings, trust, certificates of deposit (CDs), IRA retirement accounts and money market deposit accounts. All of these types of accounts generally are insured by the FDIC up to the legal limit of $250,000 and sometimes even more for special kinds of accounts or ownership categories. The key word here is “deposits” – that’s what the FDIC insures.

What is not covered by FDIC insurance?

As banks and other financial institutions have expanded their offerings to include a broad array of investment products that are not deposits, such as mutual funds, annuities, life insurance policies, stocks and bonds. Unlike the traditional checking or savings account, however, these non-deposit investment products are not insured by the FDIC. Here are some of the more common ones:

Mutual Funds. You may be invested in a money market mutual fund, which may invest in short-term CDs or securities such as Treasury bills and government or corporate bonds. Do not confuse a money market mutual fund with an FDIC-insured money market deposit account, which earns interest in an amount determined by, and paid by, the financial institution where your funds are deposited. The key point to remember about mutual funds, stocks, bonds or other investment products, whether at a bank or elsewhere, is that these funds are NOT deposits, and therefore are NOT insured by the FDIC – or any other agency of the federal government.
Treasury Securities. Even though Treasury securities are not covered by federal deposit insurance, payments of interest and principal (including redemption proceeds) on those securities that are deposited to an investor’s deposit account at an insured depository institution ARE covered by FDIC insurance up to the $250,000 limit. There is no federal insurance on Treasury securities, though they are backed by the full faith and credit of the United States Government.
Safe Deposit Boxes. The contents of a safe deposit box are not insured by the FDIC. In the event of a bank failure, in most cases the acquiring institution would take over the failed bank’s offices, including locations with safe deposit boxes. If no acquirer can be found the FDIC would send boxholders instructions on how to remove the contents of their boxes.
Annuities. These are underwritten by insurance companies, and sold at some banks. Not FDIC insured.
Stocks, bonds, Treasury securities or other investment products. Whether purchased through a bank or a broker/dealer, they are not FDIC insured.

For More Information about the FDIC

Call toll-free at 1-877-ASK-FDIC (1-877-275-3342) from 8 a.m. until 8 p.m. Eastern Time, Monday through Friday.

For TDD call 1-800-925-4618.

Calculate your insurance coverage on-line using the FDIC’s Electronic Deposit Insurance Estimator at: www2.fdic.gov/edie

Request a copy of “Your Insured Deposits,” which provides a detailed discussion on all the ownership categories, or by calling toll free 1-877-275-3342.
Read more about FDIC insurance on-line at: www.fdic.gov/deposit/deposits/index.html

Send your questions by e-mail using the FDIC’s on-line Customer Assistance Form at: www2.fdic.gov/starsmail

Mail your question to:
FDIC
Attn: Deposit Insurance Outreach
550 17th Street, N.W.
Washington, DC 20429-9990