Why Your Money is Safer in a Bank

Alternatives to a bank account, like keeping your money at home, places you at risk of losing your cash to burglary, theft, fire, floods, or other potential disasters. Plus, if you hide it somewhere, there’s always a chance you may forget where you put it, and you’ll never earn a dime on it.

When you use a bank account:

• Your money can be insured against loss up to $250,000 and many banks offer products that can provide additional protection
• Your money can gain interest, depending on the type of account you set up

• Your money is protected from unauthorized electronic transactions carried out, for example, by someone who has stolen your identity
• You can use banking services to conveniently transfer money
• You can take advantage of electronic bill pay services to efficiently pay bills instead of mailing payments
• You may use alerts and other tools to help you track your money, keep an eye on your spending habits and improve your budget

What is FDIC insurance?

The Federal Deposit Insurance Corporation (FDIC) is a federal agency that protects bank depositors against insured deposit losses when FDIC-insured banks close. The FDIC insures up to $250,000 per depositor per FDIC-insured bank. In the nearly 90-year history of the FDIC, no depositor has ever lost a penny of an insured deposit due to a bank closure.

Do I need to apply for FDIC insurance when I open a bank account?

No. Bank customers do not need to do anything; it’s automatically applied to any FDIC-insured bank deposit account. View the FDIC's Deposit Insurance resource.

How can I check if my financial institution is FDIC-insured?

FDIC-insured banks will have the FDIC logo at teller stations or posted at bank entrances. Look for “Member FDIC.” You may also check using the FDIC’s BankFind online tool to search for your institution. Alternatively, you can also contact the FDIC directly at 1-877-275-3342 and submit a request.

Are all bank products covered by the FDIC?

No. Deposits held in checking accounts, savings accounts, money market accounts, and certificates of deposits (CDs) are covered. Annuities, bonds, crypto assets, life insurance, mutual funds, safe deposit box contents, and stocks are not covered.  For more information, check out the FDIC’s resource on “Are My Accounts Insured By the FDIC?”

Are there ways to protect my funds beyond $250,000?

Many banks offer a range of products and account options that can provide additional protection for your funds. Ask your bank if any of those products might be right for you.

Does FDIC insurance apply to online banks?

Yes, it does so long as they are member FDIC banks. FDIC insurance is not limited to brick-and-mortar banks.

What happens when FDIC-insured banks close?

The FDIC works to ensure that your insured deposits - up to $250,000 - are covered and available for you. The FDIC may take any of the following approaches to address the situation:

1. Pay depositors
2. Manage the bank and set up a “bridge bank” to assume the deposits and obligations of closed banks.
3. Sell it to another bank.

Regardless of the strategy the FDIC uses, you can rest assured that you will be able to access your insured deposits.

Where can I learn more?

• ABA’s Banking Snapshot page
• Find the Bank That’s Right For You
• Deposit Insurance
• FDIC “Is My Account Fully Insured?” Tool
• FDIC page “When a Bank Fails - Facts for Depositors, Creditors, and Borrowers”
• ABA Foundation Tips to Protect Yourself and Your Money