Understanding the FDIC's Role

What is the FDIC and What Does Federal Deposit Insurance Cover?

The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 dollars, protecting consumers from the dangers of bank failure and stabilizing the banking market during economic troubles.1 Nationwide Bank is a member of the FDIC, meaning deposits are covered.

FDIC history and role

For more than 80 years, the FDIC has protected consumers from financial loss in the event of a bank’s failure. Following the stock market crash of 1929 and the ensuing economic turmoil of the 1930s, the U.S. federal government sought ways to stabilize the economy. 

In 1933, the Roosevelt administration created the FDIC to help counter the negative public sentiment surrounding banks at the time. With the introduction of the FDIC, bank deposits were now insured by the federal government, meaning that even if a bank failed, individual customers would not lose money. The creation of the FDIC represented a major step in restoring consumer confidence in the banking industry, which had contributed to the economic crisis. Not only did the FDIC help restore confidence and stabilize the banking industry during the Great Depression, it also played a critical role in alleviating banking crises during the savings and loan crisis of the 1970s and 1980s and during the Great Recession of 2008.2

FDIC bank insurance

Today, the FDIC still protects consumers from bank failure. In the event a bank fails, individuals are covered up to $250,000. The FDIC covers:

  • Individual accounts including: 
    • Checking accounts
    • Money market/savings accounts
    • CD accounts
  • Revocable trust accounts (including accounts with a POD beneficiary)
  • Irrevocable trust accounts
  • Employee  benefit plan accounts
  • Corporation, partnership or unincorporated association accounts
  • Government accounts3

This coverage extends to both the principal and interest on funds from such accounts. For specifics on coverage, you'll want to visit the FDIC website, which offers resources and a calculator. We've included a few examples here for clarity:

If a bank fails, the FDIC will pay out for lost funds and assume control of the bank. There is no need to sign up for coverage; if your bank is FDIC insured, your deposits are automatically covered. However, the FDIC covers only deposits made in the United States. Overseas payable deposits are not covered.4

How do I know if a bank is FDIC insured?

If you are planning to open a new account with a bank and you want to ensure that your money will be covered under FDIC, you can check for an FDIC sign displayed on their advertising, contact the FDIC directly at 877-275-3342 or visit the Federal Deposit Insurance Corporation website. Nationwide Bank is FDIC insured.

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