FDIC insurance, provided by the Federal Deposit Insurance Corporation, is a form of deposit insurance that protects depositors against the loss of their funds up to a certain limit in the event of a bank failure. FDIC insurance applies to all types of deposit accounts, including checking accounts, savings accounts, and money market accounts. The standard insurance amount is $250,000 per depositor, per insured bank, for deposit accounts. For joint accounts, the insurance amount is $500,000. However, there are some exceptions to these limits, such as for certain retirement accounts and trust accounts.

FDIC insurance is important because it provides depositors with peace of mind, knowing that their funds are protected in the event of a bank failure. This insurance also helps to maintain stability in the financial system by preventing bank runs, which can occur when depositors lose confidence in a bank and withdraw their funds en masse. FDIC insurance was created in 1933 as part of the Glass-Steagall Act, which was enacted in response to the bank failures of the Great Depression.

Read more