The FDIC, or Federal Deposit Insurance Corporation, is a government agency that helps protect your money if you have it in a bank. If your bank is FDIC-insured and it goes out of business, the FDIC will make sure you don’t lose the money in your account.
The FDIC was created in 1933 after the Great Depression, a time when many banks failed and people lost their savings. Since then, the FDIC has helped build trust in banks by making sure your money is safe, even if something goes wrong.
How Does FDIC Insurance Work?
If your bank is FDIC-insured, you don’t have to do anything to get coverage—it’s automatic. The insurance covers the money in your:
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit (CDs)
However, FDIC insurance does not cover investments like stocks, bonds, or mutual funds.
FDIC Insurance Limits
The FDIC insures up to $250,000 per depositor, per bank, for each type of account ownership. This means if you have money in a checking account and a savings account at the same bank, the combined total of those accounts is insured up to $250,000.
If you have more than $250,000, don’t worry! You can still be fully insured if you spread your money across different ownership categories (like individual and joint accounts) or different banks.
Here’s an example:
If you have $250,000 in a checking account and $250,000 in a savings account at the same bank, only $250,000 of that total is insured because it’s under your name alone. But if you have $250,000 in a checking account and another $250,000 in a joint account with someone else, both accounts are fully insured.
Use the FDIC’s EDIE Tool to Calculate Your Coverage
To make sure your money is fully covered, the FDIC has a helpful tool on their website called EDIE (Electronic Deposit Insurance Estimator). EDIE helps you figure out how much of your money is protected under FDIC insurance. Just enter your account details, and EDIE will show you how much of your deposits are insured and if any amount is over the limit.
Where to Learn More
To learn more about how FDIC insurance works and use the EDIE tool, visit the FDIC’s website at www.fdic.gov. This will help you understand how to protect your savings and make sure your money is always safe.
Have questions or need assistance?
If you have questions about this topic or need assistance with your banking needs, please speak to one of our knowledgeable staff at your local Bar Harbor Bank & Trust branch. We’re here to help you build a solid financial future.
