An independent agency of the U.S. government that insures bank deposits. It was established by Congress in 1933 following the numerous bank failures that occurred during the Great Depression. The FDIC’s mission is to maintain the stability of and public confidence in the U.S. financial system. FDIC-insured deposits are backed by the full faith and credit of the U.S. government. Most, but not all, accounts in banks and savings and loans are insured. Institutions that are insured by the FDIC must display a sign at each teller window. Each bank account held is insured up to $100,000. Examples of insured accounts include checking and savings accounts, NOW accounts, Christmas Club accounts, and certificates of deposit. The FDIC charges financial institutions a fee on their assets that helps pay for the insurance.
Stocks, mutual funds, and other investments are not covered by deposit insurance. Neither are Treasury securities (bills, notes, and bonds) purchased by an insured depository institution on a customer’s behalf. However, in the event of a bank’s default, the Treasury securities held by that bank on behalf of the customer remain the customer’s property.