Condition of the FDIC Insurance Fund

The FDIC Deposit Insurance Fund balance reached a record $121 billion in June 2021. Growth in the fund balance in the first half of 2021 reflected $3.5 billion in assessments paid by banks. No banks failed during this period.

Growth of the fund raised its “reserve ratio” to insured deposits up to 1.27 percent, from a three-year low of 1.25 percent in in March.

The fund’s reserve ratio has been below the statutory minimum of 1.35 percent since March 2020. When the fund’s declines below this level, the FDIC is required under 12 U.S.C. 1817(b)(3)(E) to implement a restoration plan to restore the fund within eight years. This would involve higher assessments for a period.

However, the FDIC Board determined in September 2020 that the decline was due to an unprecedented surge in deposits, not bank failures and insurance losses. Accordingly, the Board elected last September to hold off on raising assessments in anticipation that the surge will reverse and bring the fund reserve ratio back above 1.35 percent in the foreseeable future.