Placing your money in a federally-insured and highly regulated bank ensures that your hard-earned funds are protected and available when you need them.
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:
- Pay depositors
- Manage the bank and set up a “bridge bank” to assume the deposits and obligations of closed banks.
- 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?
FAQs
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.
Why is it safer to keep your money in a bank? ›
As long as your deposit accounts are at banks or credit unions that are federally insured and your balances are within the insurance limits, your money is safe. Banks are a reliable place to keep your money protected from theft, loss and natural disasters. Cash is usually safer in a bank than it is outside of a bank.
How is your money safe in a bank? ›
The FDIC insures your bank account to protect your money in the unlikely event of a bank failure. Bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), which is part of the federal government. The insurance covers accounts containing $250,000 or less under the same owner or owners.
Why is your money safer in a bank account than stored at home? ›
Savings accounts are a safe place to keep your money because all deposits made by consumers are guaranteed by the Federal Deposit Insurance Corporation (FDIC) for bank accounts or the National Credit Union Administration (NCUA) for credit union accounts.
Why do you think keeping money in banks is safer than at home? ›
Saving at a bank provides better security protection than keeping money at home. Banks have strict security systems, such as protection against theft and loss of money.
Why is it better to place your money in a bank instead of hiding your money under the mattress? ›
On the other hand, money stored in an FDIC-insured bank is insured up to $250,000 per person, meaning that money deposited in accounts like checking, savings, and retirement savings is guaranteed and protected by the Federal Insurance Deposit Corporation, which says on its website that since its establishment in 1933, ...
What is the safe of a bank? ›
A bank vault is a secure space where money, valuables, records, and documents are stored.
Is my money safe in a US bank? ›
The Federal Deposit Insurance Corporation, more commonly known as FDIC, provides depositors with insurance so they know their money is safe.
What protects one's money in the bank? ›
FDIC deposit insurance protects your money in deposit accounts at FDIC-insured banks in the event of a bank failure. Since the FDIC was founded in 1933, no depositor has lost a penny of FDIC-insured funds.
What is the safest bank? ›
JPMorgan Chase, the financial institution that owns Chase Bank, topped our experts' list because it's designated as the world's most systemically important bank on the 2023 G-SIB list. This designation means it has the highest loss absorbency requirements of any bank, providing more protection against financial crisis.
Individual Account Owners have several options to protect deposit balances:
- Open Accounts at Multiple Banks. ...
- Open Accounts with Different Owners. ...
- Open Accounts with Trust/POD [pay-on-death] Designations. ...
- Open a CD Account, or Money Market Account, with a bank that offers IntraFi (formerly CDARs) services.
Does the DICGC insure just the principal on an account or both principal and accrued interest? The DICGC insures principal and interest upto a maximum amount of ₹ five lakhs.
Why is money safe in a bank? ›
Most deposits in banks are insured dollar-for-dollar by the Federal Deposit Insurance Corp. This insurance covers your principal and any interest you're owed through the date of your bank's default up to $250,000 in combined total balances.
Why shouldn't you keep cash at home? ›
Probably the biggest risk of having too much cash at home is that it could be stolen, lost in a fire or even simply misplaced. Unlike some other forms of payment, cash cannot be replaced. Once it's gone, it's gone.
Can money go bad in a safe? ›
General moisture buildup in a safe is a concern, especially if you live in a humid environment. But exposure to a large amount of water, such as during a flood or burst pipe, can also damage paper currency.
Is it good to keep all your money in the bank? ›
Keeping too much of your money in savings could mean missing out on the chance to earn higher returns elsewhere. It's also important to keep FDIC limits in mind. Anything over $250,000 in savings may not be protected in the rare event that your bank fails.
Is it safe to keep all your money in one bank? ›
As long as that bank is FDIC-insured and your deposit doesn't exceed $250,000, you should be safe to do so. It might be worth it to maintain an account at a separate bank, however, just in case a bank error or accidental account freeze results in a loss of access to your money for a time.
What are the risks of putting money in the bank? ›
Generally, money kept in a bank account is safe—even during a recession. However, depending on factors such as your balance amount and the type of account, your money might not be completely protected. For instance, Silicon Valley Bank likely had billions of dollars in uninsured deposits at the time of its collapse.
Why should we keep money in a bank and not at home? ›
Safe way to store your money
Storing money at home is not practical- it's not possible to store more than a certain amount and there is always the risk of it getting stolen or damaged. When you store your money in a bank, your money is safe, because even if the bank is robbed, most of your savings will be insured.
