What Is FDIC (Federal Deposit Insurance Corporation)?
Definition
A government agency that insures bank deposits up to $250,000 per depositor. If your bank fails, the FDIC guarantees you get your money back.
Example: "I keep my savings in an FDIC-insured bank, so even if the bank went bankrupt, my money is protected."
Why It Matters
FDIC insurance is what makes putting your money in a bank fundamentally safe. Created in 1933 after thousands of banks failed during the Great Depression, the FDIC has never failed to protect an insured deposit. Coverage applies per depositor, per bank, per ownership category, up to $250,000. This means a married couple can have up to $500,000 in joint accounts at one bank and still be fully insured. When choosing a bank, always verify it displays the FDIC logo. Credit unions have similar protection through the NCUA.
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