Q & A: Answers to Your Questions About FDIC Insurance
Q: How can a depositor tell whether a bank is insured?
A: Insured banks must display an official sign at each teller window or station where deposits are regularly received. To find out if a particular bank or savings association has FDIC insurance coverage, contact the FDIC.
Q: Whose deposits does the FDIC insure?
A: Any person or entity can have FDIC deposit insurance in an insured bank located in the United States. A person does not have to be a U.S. citizen or resident to have deposits insured by the FDIC.
Q: Does FDIC insurance protect creditors and shareholders?
A: FDIC insurance only protects depositors, although some depositors may also be creditors or shareholders of an insured bank.
Q: Does the FDIC insure all investments sold by an insured bank?
A: The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities or municipal securities, even if they were bought from an insured bank. The FDIC also does not insure U.S. Treasury bills, bonds or notes, but those are backed by the full faith and credit of the United States government.
Q: Does the FDIC insure an unpaid cashier's check, interest check, money order or expense check issued by an insured bank?
A: If a depositor holds one or more of these items from an insured bank, and the insured bank fails before the item is cashed elsewhere, the FDIC will add the item to any other deposits held in the same ownership category at the same insured bank. For example, an outstanding interest check payable to a depositor will be added to their other single ownership accounts, if any, and the total insured up to $250,000.
Q: Does the FDIC insure safe-deposit boxes if a bank fails?
A: The FDIC does not insure safe-deposit boxes or their contents. In the event of a bank failure, the FDIC in most cases arranges for an acquiring bank to take over the failed bank's offices, including locations with safe-deposit boxes. If no acquirer is found, boxholders would be sent instructions for removing the contents of their boxes.
Q: How does the FDIC determine ownership of deposits?
A: The FDIC presumes that deposits are owned as shown on the deposit account records of the insured bank. The deposit account records of an insured bank include account ledgers, signature cards, certificates of deposit, passbooks and certain computer records. Account statements, deposit slips and canceled checks are not considered deposit account records for purposes of determining deposit insurance coverage.
Q: Can I increase my insurance coverage by depositing funds with different insured banks?
A: Deposits with each FDIC-insured bank are insured separately from any deposits at another insured bank. If an insured bank has branch offices, the main office and all branch offices are considered one insured bank – a depositor cannot increase insurance coverage by placing deposits at different branches of the same insured bank. Similarly, deposits held with the Internet division of an insured bank are considered the same as deposits with the "brick and mortar" part of the bank, even if the Internet division uses a different name. If two banks are affiliated, such as having a common holding company, but are separately chartered (indicated by having two different FDIC Certificate numbers), deposits in each bank would be separately insured.
Q: Can I increase my insurance coverage by dividing my deposits into several different accounts at the same insured bank?
A: Deposit insurance coverage can be increased only if the accounts are held in different categories of ownership. These categories include single accounts, retirement accounts, joint accounts and revocable trust accounts.
Q: Can I increase my coverage for my joint accounts by using a different co-owner's Social Security number on each account or changing the way the owners' names are listed on the accounts?
A: Using different Social Security numbers, rearranging the order of names listed on accounts or substituting "and" for "or" in joint account titles does not affect the amount of insurance coverage available to co-owners of joint accounts.
For more information about FDIC insurance, click here.