What does FDIC stand for? Those four letters name the Federal Deposit Insurance Corporation, an independent agency of the U.S. government that protects money people keep in banks. If an insured bank fails, the FDIC steps in so depositors get their insured money back.
You see the letters on bank doors, websites and ads in the phrase "Member FDIC." That line means the bank pays into the FDIC insurance fund and its deposits are covered up to the legal limit.
Quick facts
Stands for
Federal Deposit Insurance CorporationType
Initialism, said F D I CStarted
Created by the Banking Act of 1933Standard limit
250,000 dollars per depositor, per insured bank, per ownership categoryCovers
Checking, savings, money market deposit accounts, CDsDoes not cover
Stocks, bonds, mutual funds, annuities, crypto, safe deposit box contentsNot to be confused with
NCUA, which insures credit unions
What does FDIC stand for, word by word?
| Letter | Word | Role in the name |
|---|---|---|
| F | Federal | Run at the national level |
| D | Deposit | It deals with money placed in banks |
| I | Insurance | It pays back insured funds if a bank fails |
| C | Corporation | It is set up as a government corporation |
Congress created the agency during the Great Depression, when thousands of banks had closed and many families lost their savings. It began insuring deposits in 1934. Since then, no depositor has lost a cent of insured money in an FDIC insured bank.
What the FDIC actually does
- Insures deposits at member banks and savings associations.
- Examines and supervises many banks for safety and for fair treatment of customers.
- Handles failed banks, often by moving accounts to a healthy bank so customers keep using their cards and checks.
- Manages the Deposit Insurance Fund, which is paid for by premiums that banks pay, not by a yearly budget from Congress.
On a bank's website footer: "Member FDIC. Equal Housing Lender." This tells you the bank's deposit accounts are federally insured.
FDIC coverage in plain words
The standard insurance amount is 250,000 dollars per depositor, per insured bank, for each ownership category. Ownership categories include single accounts, joint accounts, certain retirement accounts such as an IRA, and trust accounts. A married couple with a joint account and two single accounts at one bank can therefore be covered for more than the base amount in total.
| Covered | Not covered |
|---|---|
| Checking accounts | Stocks and bonds |
| Savings accounts | Mutual funds and ETFs |
| Money market deposit accounts | Annuities and life insurance |
| Certificates of deposit (CDs) | Crypto assets |
| Cashier's checks and money orders from the bank | Items in a safe deposit box |
Investment products can be sold inside a bank branch and still not be FDIC insured, which is why such products carry the line "Not FDIC insured."
FDIC vs NCUA and SIPC
Three sets of letters protect different kinds of accounts:
- FDIC insures deposits at banks.
- NCUA, the National Credit Union Administration, insures deposits at federally insured credit unions in a similar way.
- SIPC, the Securities Investor Protection Corporation, protects customers if a brokerage firm fails and their securities go missing. It does not cover losses when investments drop in value.
Other money terms, including APY and ACH, sit in the business acronyms section.
FDIC stands for safety, not investment returns
Sentences that show how people use the term:
- "Make sure the online bank is FDIC insured before you open an account."
- "Her CD is covered by the FDIC up to the limit."
- "The FDIC took over the failed bank on Friday evening."
- "Brokerage accounts are not FDIC insured."
Read the letters one by one, "F D I C," so it counts as an initialism. Print it in capitals without periods.
Questions people ask
What does FDIC insured mean?
It means the account is at a bank that is a member of the FDIC, and the deposits are protected up to the legal limit if the bank fails.
How much does the FDIC insure?
The standard amount is 250,000 dollars per depositor, per insured bank, for each account ownership category.
Who pays for FDIC insurance?
Member banks pay premiums into the Deposit Insurance Fund. Customers do not pay a separate fee for the coverage.
Does FDIC cover credit unions?
No. Federally insured credit unions are covered by the NCUA, a separate agency that works in a similar way.
When was the FDIC created?
It was created by the Banking Act of 1933 and began insuring deposits in 1934.