What is ‘FDIC Insured Account’
An account that meets the requirements to be covered or insured by the Federal Deposit Insurance Corporation (FDIC). An FDIC Insured Account has to be in a bank that is a participant of the FDIC program. The different accounts that can be FDIC insured are NOW, checking, savings, Certificate of Deposits (CD) and money market deposit accounts. Accounts that do not qualify as FDIC insured accounts are safe deposit boxes, investment accounts (stocks, bonds, etc.) mutual funds, life insurance policies, etc.
Explaining ‘FDIC Insured Account’
If a depositor wants an FDIC insured account, it is important to make sure that the desired bank is a participant of the FDIC program. Banks that are participants of the FDIC, are required to display an official sign at each teller window or station where deposits are regularly received. The maximum dollar amount that is insured in a qualified account is $250,000 per bank. In other words, it is possible for a depositor to deposit $1 million in four different banks and each account will be fully insured.
Further Reading
- Deposit insurance, bank regulation, and financial system risks – www.sciencedirect.com [PDF]
- The liability structure of FDIC-insured institutions: changes and implications – heinonline.org [PDF]
- The Economics of Deposit Insurance: A Critical Evaluation of Proposed Reforms – heinonline.org [PDF]
- The valuation of FDIC deposit insurance using option-pricing estimates – www.jstor.org [PDF]
- Deregulation and bank financial policy – www.sciencedirect.com [PDF]
- Deposit insurance reform: a functional approach – www.sciencedirect.com [PDF]
- How large has the federal financial safety net become? – papers.ssrn.com [PDF]
