The Federal Deposit Insurance Corporation (FDIC) is often described as the cornerstone of financial stability in the United States, but have you ever wondered how exactly the FDIC safeguards your finances?

In this blog, we’ll unravel the intricacies of the FDIC, exploring its role in maintaining financial stability and the crucial protection it provides to banks and customers through FDIC deposit insurance. Keep reading as we navigate the world of financial security together.

What is the FDIC?

Established in 1933 during the tough times of the Great Depression, the Federal Deposit Insurance Corporation (FDIC) is like a financial safety net operated by the United States government. Its main job is to make sure that our money is safe and ensure that people feel confident in the country’s financial system.

The FDIC does this in a few ways. It protects our savings by insuring them, making sure that banks stay safe and stable, and handling things carefully when a bank faces challenges. In simple terms, the FDIC is not just a government agency; it’s a guardian that keeps our money safe and helps us trust in the stability of our country’s finances.

What is FDIC deposit insurance?

The FDIC provides deposit insurance, which guarantees the safety of deposits up to a certain limit in FDIC insured banks and savings associations. This limit is set at $250,000 for each person, for each bank where your money is insured. So, no matter what happens, your money is protected up to this amount.

Account ownership categories covered by FDIC insurance include:

  • Single accounts
  • Joint accounts
  • Certain retirement accounts —for example, Individual Retirement Accounts (IRAs)
  • Revocable trust accounts
  • Irrevocable trust accounts
  • Employee benefit plan accounts
  • Corporation/partnership / unincorporated association accounts
  • Government accounts

Why is deposit insurance important?

FDIC deposit insurance is a game-changer for both banks and customers:

For customers:

  • Security and confidence: FDIC insurance provides a reassuring layer of security, letting you know your deposits are safe.
  • Encourages savings: With FDIC insurance, you’re more likely to feel comfortable saving your money in banks. This not only ensures the safety of your funds but also encourages responsible financial planning for your future.
  • Stimulates economic activity: A stable banking environment, backed by FDIC insurance, helps boost economic activity. It means more investments, lending, and a healthier financial landscape overall.
  • Promotes financial inclusion: FDIC insurance encourages everyone to be a part of the formal banking system. It’s about making sure that a wider community can benefit from the safety and advantages that come with banking.

For banks:

  • Access to Funding: FDIC insurance is a reliable funding source for your bank. It encourages customers like you to deposit money, providing your bank with a steady and secure flow of funds.
  • Risk mitigation: If there are potential challenges, FDIC steps in to reduce risks. It’s a safety net that helps your bank navigate uncertainties and remains a solid choice for you.
  • Stability and liquidity: Your bank enjoys stability with FDIC insurance, minimizing the risk of large withdrawals that could cause problems. This stability ensures your bank has enough money to operate smoothly.

How do you know if your account is covered by FDIC insurance?

If your account is with F&M Bank, it is covered by FDIC insurance. Generally speaking, FDIC insurance safeguards deposits across all account types in FDIC insured banks, but it excludes non-deposit investment products, even if offered by FDIC insured banks. It’s important to note that FDIC deposit insurance doesn’t extend to defaults or bankruptcies of non-FDIC insured institutions. Stay informed to ensure the full scope of your protection.

F&M Bank, your trusted FDIC insured bank

Experience peace of mind and financial security by choosing F&M as your trusted FDIC insured bank. With a legacy built on stability and customer confidence, F&M ensures that your deposits are safeguarded up to $250,000 per account.

Your stress-free financial journey begins here. Enroll today.