The Federal Direct Insurance Corporation, or FDIC, is an independent government agency that insures consumer bank deposits against bank collapses. Most depositors enjoy up to $250,000 in coverage per bank, per account type.
FDIC insurance covers deposits and deposit accounts at insured banks, including:
The FDIC provides standard insurance of $250,000 per depositor, per ownership category, per insured bank.
Some products, like checking and savings accounts, are lumped into one ownership category. That means your $250,000 coverage is “shared” by multiple accounts.
But if you have two ownership categories at one bank, or the same category at two different banks, you’re insured up to $250,000 per account.
The FDIC divides deposit accounts into several categories covering consumers, businesses, and even government entities. Here, we’ll focus on the most common consumer deposit accounts.
FDIC insurance explicitly excludes investments – even those purchased at FDIC-insured banks – like:
Instead, investors are protected by SIPC insurance in the event that assets go missing. (Unfortunately, even SIPC insurance doesn’t pay out when the stock market collapses.)
The FDIC also generally excludes money held in financial apps like PayPal, though rules may vary.
FDIC insurance guards against bank failures by selling deposit accounts to a healthy bank or paying depositors any lost funds. (Up to insured limits.)
In the event of a merger, the FDIC will also insure deposits from each bank separately for at least six months. Depositors can use this grace period to restructure their finances for maximum coverage, if necessary.
However, FDIC insurance does not cover:
FDIC insurance is there to protect your deposits from potential bank collapse. But it has limits – and as your accounts grow, you may need to move money around to stay fully covered.
And when you’re ready to put some of that cash to work for you, Q.ai’s AI-backed Investment Kits are waiting.
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