Federal Deposit Insurance Corporation

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Federal Deposit Insurance Corporation (FDIC)

A federal institution that insures bank deposits.

Federal Deposit Insurance Corporation

A corporation owned by the United States government that insures bank deposits up to a certain level, so as to reduce pressure for bank panics. Created by the Glass-Steagal Act of 1933, the FDIC backs all bank deposits and some retirement accounts with the full faith and credit of the United States up to either $100,000 or $250,000, depending on the type of account. This amount may be changed by statute. A bank must purchase bank insurance from the FDIC in order to be eligible for this coverage. The FDIC helps maintain consumer confidence in banks and, by extension, the financial system.

Federal Deposit Insurance Corporation (FDIC)

The federal agency that insures deposits at commercial banks to a limit of $100,000 per depositor or combination of depositors at each insured bank. This insurance also applies to certificates of deposit sold through retail brokerage houses. The insurance fund is financed by a small fee paid by the banks based on the amount of their insured deposits.

Federal Deposit Insurance Corporation (FDIC).

The Federal Deposit Insurance Corportion (FDIC) insures deposits in banks and thrift institutions, assuring bank customers that their savings and checking accounts are safe.

Currently, the coverage limits are $100,000 per depositor per bank for individual, joint, and trust accounts, and $250,000 for self-directed retirement accounts. Business accounts are also insured up to $100,000.

You qualify for more than $100,000 coverage at a single bank, provided your assets are in these different types of accounts.

For example, you are insured for up to a total of $100,000 in all accounts registered in your own name and for another $100,000 representing your share of jointly held accounts. In addition, your individual retirement account (IRA) is insured up to $250,000 if the money is invested in bank products, such as certificates of deposit (CDs).

However, if you purchase mutual funds, annuities, or other investment products through your bank, those assets are not insured by the FDIC even if they carry the bank name.

The FDIC, which is an independent agency of the federal government, also regulates more than 5,000 state chartered banks that are not members of the Federal Reserve System.

Federal Deposit Insurance Corporation (FDIC)

An independent agency (www.fdic.gov) created by Congress in 1933. It supervises banks, insures deposits up to $100,000 per depositor per institution,and acts as a receiver and liquidator for failed banks.

References in periodicals archive ?
(3.) Charles Calomiris and Stephen Haber argue that, contrary to the common perception, the introduction of FDIC insurance did not play a causal role in ending bank runs in the Great Depression; "the banking crisis of 1932-33 ended months before the establishment of FDIC insurance" (2014, 190).
According to the regression results, the sounder banks were less likely to choose FDIC insurance. Banks are less likely to choose FDIC insurance if they have higher levels of capital, more lending, greater deposit funding, fewer OREO problems, and tend to be somewhat smaller (Table 4).
Conversely, the FDIC has held that bank products that do not offer a principal protection feature are not deemed "deposit obligations" of the bank, and therefore are not eligible for FDIC insurance. Letter from FDIC to Kevin P.
The total FDIC insurance limits on combined deposits listed in the four categories are: 1) total of all deposits in a single account holder's name, coverage limit of $250,000; plus 2) total of all retirement deposits, for example, Roth IRAs or regular IRAs, in a single account holder's name, add an additional coverage limit of $250,000; plus 3) joint-titled accounts with two or more persons, add an additional $250,000 per co-owner; plus 4) formal or informal revocable trust accounts, add an additional $250,000 per beneficiary, multiplied by the number of owners [12 CFR 330.3(a)].
For the customer, CDARS offers the safety of FDIC insurance with the convenience of one rate, one regular statement, and one banking relationship.
The OCC guidance consequently emphasizes the risks of entrusting assets to even registered broker/dealers and the importance of reviewing their credit histories, and it outlines steps banks can take to see that FDIC insurance covers their purchased CDs.
Senate Committee on Banking, Housing, and Urban Affairs, former FDIC Acting Director John Reich identified the reason for Superior Bank's failure primarily as "the decision of its board and management to book high levels of retained interests related to securitization." Reich continued, "Since 1988, failures of institutions with risk characteristics similar to those of Superior have cost the FDIC insurance funds more than $1 billion."
For example, certificates of deposit (CDs) provide safety through FDIC insurance, but the returns have a tendency to be rather low.
The FDIC insurance premium rate should relate to the riskiness of the thrifts investment portfolio, such as the riskiness of its stock, bond and real estate portfolios.
As bank failures go, the $330 million that NBW's 1990 collapse will cost the shaky taxpayer-backed FDIC insurance fund isn't grand.
The FDIC has decided to limit FDIC insurance of P&I custodial accounts to $100,000 per investor instead of $100,000 per borrower.