FDIC
FDICAlso called federal Deposit Insurance Corporation
The Federal Deposit Insurance Corporation is the independent US agency that insures bank deposits, supervises many banks and winds down banks that fail. Created in 1933, it covers deposits up to $250,000 per depositor, per insured bank, per ownership category. It is the primary federal supervisor for state chartered banks that are not Federal Reserve members.
How it works
The FDIC runs the Deposit Insurance Fund, financed by premiums that insured banks pay. Its examiners review state non-member banks for safety and soundness and for consumer compliance, including anti-money laundering controls. When a bank fails, the FDIC acts as receiver. It usually sells deposits to another bank or pays insured depositors directly, and it requires the largest banks to file resolution plans.
For compliance teams at state non-member banks, the FDIC sets the examination agenda and can bring enforcement actions such as consent orders and civil money penalties. With the Federal Reserve and the OCC, it issues interagency guidance on third-party risk, which shapes how banks oversee fintech partners. Its deposit records rules also matter to banking as a service arrangements, where customer funds sit in pooled accounts.
The rules
Created the FDIC and federal deposit insurance, which began operating in 1934.
US banksSets the FDIC's powers over deposit insurance, supervision, enforcement and receivership of failed banks.
Insured depository institutionsMade the standard maximum deposit insurance amount of $250,000 permanent.
Insured depositsCommon questions
Which banks does the FDIC supervise?
The FDIC is the primary federal supervisor of state chartered banks that are not members of the Federal Reserve System. It also has backup authority over all insured banks because it insures their deposits.
What does FDIC insurance cover?
It covers deposits such as checking, savings and certificates of deposit, up to $250,000 per depositor, per insured bank, per ownership category. It does not cover stocks, bonds, mutual funds, crypto assets or insurance products.
How is the FDIC funded?
Mainly through premiums paid by insured banks into the Deposit Insurance Fund, and through earnings on that fund's investments in US government securities. It does not rely on annual appropriations from Congress.
Does FDIC insurance apply when a fintech fails?
No. FDIC insurance protects depositors only if an insured bank fails. Funds held through a nonbank fintech are covered only when they sit in an insured bank and the records identify each owner.
