Sleep Soundly or Risk It All: Is Your Bank Account Fully Insured?

  • AUTHOR: editor
  • POSTED ON: April 4, 2023

There’s nothing quite as hair-raising as the thought of banks running out. When such whispers seep into the financial system, the foundation begins to tremble, sending shivers down the spines of investors and bankers.

Over the years, several large institutions have gone through major collapses, and because of this, almost all of us are eager to know if our individual deposits are in safe hands or not.

This is when it becomes quite essential to understand how FDIC works. The financial world is a turbulent sea of uncertainties, with waves of instability and unpredictability threatening to capsize even the sturdiest vessels. Amidst these uncertainties, there stands a steadfast protector, a bulwark against the forces of chaos: The Federal Deposit Insurance Corporation – the guardian angel for the banking system, ensuring that failures are rare.

FDIC - Federal Deposit Insurance Corporation

FDIC was established back in 1933 with the aim of offering stability to the banking system after the Great Depression – a time when bank failures left depositors penniless. The legislation in charge enabled FDIC to regulate several banks at a national level while insuring deposits – the initial insured limit was $2500.

In the midst of all the chaos and uncertainties, FDIC was a glimmer of hope shone through the darkness as the peace of mind washed over depositors, knowing that their hard-earned savings were safeguarded and backed by the mighty force of FDIC while banks scrambled to quell the tides of failure.

Are My Deposits Covered?

The insured limit provided by FDIC has increased 100 times since 1933. The depositors can heave a sigh of relief now that the insurance level is $250,000. According to FDICs, you don’t have to apply for insurance; as soon as you open your deposit account at an FDIC-insured bank –  the coverage is automatically sanctioned.

What If My Deposits Exceed $250,000?

Per Depositor

The “Per Depositor” depends on the number of account owners. One account owner means your $250,000 will be covered. However, if you have a joint account with another person, FDIC permits you to have $500,000 total coverage.

Suppose you have a joint account with your spouse, and each one of you has $250,000 individually. This means you currently own $500,000 in a joint account, which brings your total coverage to $1,000,000.

Per Insured bank

With more consumers using online banking to get higher returns, researching your bank’s insurance protection has become essential. Every financial institution have a different approach when it comes to total coverage. To know more about your banks’ policies, visit them now or browse through their websites.

Ownership Category

The ownership category refers to the certitude that FDIC insurance is beyond savings and checking accounts. This also includes certificates of deposit, cashier’s checks, market deposit accounts and much more.

All in all, this means that if you have multiple accounts within one institution, your coverage will be multiplied.

Calculate your FDIC coverage now!

Bank Accounts and Savings

What If My Deposits Exceed the Coverage Amount?

After understanding per depositor criteria, you can try different strategies to subdivide your deposits, such as owning several accounts, opting for multiple ownership methods etc.

Remember, changing the ownership of accounts with larger deposits can sequel in triggering the need to file a tax return.

Tips to Remember

  • Bear in mind you can always increase your coverage by opening several accounts at different institutions.
  • Services and products like the Certificate of Deposit Account Registry, CDARS, allows you to access multiple financial institutions at one bank.

Picture this – you have been saving your hard-earned money for months, maybe even years, carefully stashing it away in your bank account. Suddenly, out of nowhere, the bank goes belly up. All of your money, hopes, and dreams are gone in an instant. It’s a nightmare scenario, but unfortunately, it’s not an entirely unlikely one.

Bank Account Insurance

This is when insuring your bank deposits becomes crucial. It’s eventually the safety net that catches you when everything falls apart. It’s the reassurance that your money is secure, even when the whole world around you is uncertain.

So, get your bank account insured today and take a deep breath, rest easy knowing that your hard-earned savings are protected by deposit insurance.

Ready to dive deeper into such topics? Check out Hayvine’s other blog posts now, and stay up-to-date on the latest news and opinions.

Updated April 4, 2023
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