What is FDIC?

From FinancialPlanning

FDIC, the Federal Deposit Insurance Corporation, is an independent agency chartered by the federal government that is responsible for protecting bank deposits in the United States. It was created in response to the many bank failures that occurred during the Great Depression.

The most well-known activity of FDIC is insuring bank deposits. FDIC protects account holders against bank failure for up to $100,000 per depositor, per bank, or $250,000 if the account is an IRA. The insurance applies to bank deposits, such as checking accounts, savings accounts, and some CDs and money-market funds.

While the limit of FDIC insurance is $100,000, an individual may have more insured assets than that at a single bank by having accounts with different titles -- for example, an individual account plus a joint account.

Bank failures have become relatively uncommon. The FDIC reports that there were none in the entire United States during 2005 or 2006. Recent failures seem to be confined to small, local banks, but much larger institutions have failed in the past. The last major banking crisis in the United States was the Savings & Loan debacle during the 1980s.

Additional Information

FDIC's comprehensive guide to deposit insurance
Bank failures - recent & historical data (since 1934)