The Federal Deposit Insurance Corporation (FDIC) preserves and promotes
public confidence in the U.S. financial system by insuring deposits
in banks and thrift institutions for at least $250,000; by identifying,
monitoring and addressing risks to the deposit insurance funds;
and by limiting the effect on the economy and the financial system when
a bank or thrift institution fails.
An independent agency of the federal government, the FDIC was created
in 1933 in response to the thousands of bank failures that occurred in the
1920s and early 1930s. Since the start of FDIC insurance on January 1, 1934,
no depositor has lost a single cent of insured funds as a result of a failure.
The FDIC receives no Congressional appropriations – it is funded by
premiums that banks and thrift institutions pay for deposit insurance coverage
and from earnings on investments in U.S. Treasury securities. With an insurance
fund totaling more than $45 billion, the FDIC insures more than $5 trillion
of deposits in U.S. banks and thrifts – deposits in virtually every
bank and thrift in the country.
Savings, checking and other deposit accounts, when combined, are generally
insured to $250,000 per depositor in each bank or thrift the FDIC insures. (On October 3, 2008, FDIC deposit insurance temporarily increased from $100,000 to $250,000 per depositor through December 31, 2009.)
Deposits held in different categories of ownership – such as single
or joint accounts – may be separately insured. Also, the FDIC generally
provides separate coverage for retirement accounts, such as individual retirement
accounts (IRAs) and Keoghs, insured up to $250,000. The FDIC's Electronic
Deposit Insurance Estimator can help you determine if you have adequate
deposit insurance for your accounts.
The FDIC insures deposits only. It does not insure securities, mutual
funds or similar types of investments that banks and thrift institutions
may offer. (Insured
and Uninsured Investments distinguishes between what
is and is not protected by FDIC insurance.)
The FDIC directly examines and supervises about 5,160 banks and savings
banks, more than half of the institutions in the banking system. Banks can
be chartered by the states or by the federal government. Banks chartered
by states also have the choice of whether to join the Federal Reserve System.
The FDIC is the primary federal regulator of banks that are chartered by
the states that do not join the Federal Reserve System. In addition, the
FDIC is the back-up supervisor for the remaining insured banks and thrift
To protect insured depositors, the FDIC responds immediately when a
bank or thrift institution fails. Institutions generally are closed
by their chartering authority – the state regulator, the Office of the Comptroller
of the Currency, or the Office of Thrift Supervision. The FDIC has several
options for resolving institution failures, but the one most used is to sell
deposits and loans of the failed institution to another institution. Customers
of the failed institution automatically become customers of the assuming
institution. Most of the time, the transition is seamless from the customer's
point of view.
The FDIC employs about 5,000 people. It is headquartered in Washington,
D.C., but conducts much of its business in six regional offices and in field
offices around the country.
The FDIC is managed by a five-person Board
of Directors, all of whom
are appointed by the President and confirmed by the Senate, with no more
than three being from the same political party.