UPDATED: Feb 25, 2020
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Many of us have insurance on our bank and savings accounts, yet most do not even realize it. The Federal Deposit Insurance Corporation (FDIC) provides insurance coverage on bank or savings association deposits in the United States up to $100,000 (provided the bank or savings association is FDIC insured). The FDIC is an independent agency of the U.S. Government.
Recent bank failures have caused concern among citizens regarding the security of their bank accounts. The most notable recent failure involves IndyMac Bank of Pasadena, CA. IndyMac is now considered the second-largest financial institution failure in U.S. history. The company had an estimated $32 billion in assets at the time of its failure.
Fortunately, nearly 10,000 depositors were covered for approximately $1 billion worth of deposits. For those wondering if their accounts would be covered in the event of a bank failure, please visit the FDIC’s Bank Find service. And for those curious about their rights as FDIC depositors, the following is the FDIC’s Depositor’s Bill of Rights.
1) You have the right to automatic deposit insurance coverage when you open a deposit account at an FDIC-insured bank, with no additional cost or action on your part.
2) You have the right to separate FDIC insurance coverage for deposits held at different FDIC-insured banks.
3) You have the right to confirm that a bank is insured by using the FDIC’s Bank Find service or by calling the FDIC toll-free at 1-877-275-3342.
4) You have the right to deposit insurance coverage of $100,000 for your deposits at an FDIC-insured bank ï¿½” up to $250,000 for your IRA deposits.
5) You have the right to deposit insurance coverage of more than $100,000 at a single bank when deposits are held in different “ownership categories,” such as a single, joint and trust accounts.
6) You have the right to confirm that your deposits are within the insurance limits by using the FDIC’s Electronic Deposit Insurance Estimator and other online resources or by calling the FDIC at 1-877-275-3342.
7) You have the right to be informed when a financial product offered by your bank is not covered by FDIC insurance.
8) You have a right, if your bank fails, to prompt access to your insured deposits.
9) You have the right, if you are an uninsured depositor, to receive distributions from the receivership as the sale of assets permits.
10) You have the right to sleep well, knowing that since the creation of the FDIC 75 years ago, no depositor has ever lost one penny of insured deposits.
Credits: FDIC, Reuters, LA Times