What is deposit insurance?
Deposit insurance is a program that protects depositors in case their bank fails. The FDIC provides up to $250,000 per depositor, per insured bank, for each account ownership category. This means that if a depositor has multiple accounts at one bank, such as a checking account and a savings account, each account is insured for up to $250,000. Note that the FDIC does not insure investments in stocks, bonds, mutual funds, or annuities.
Additional ownership categories include single accounts, retirement accounts, employee benefit plan accounts, trust accounts, business accounts, and more.
How does the FDIC protect depositors?
If a bank fails, the FDIC will step in and pay the insured depositors up to the insured amount. This means that depositors will not lose their money, and they will have access to it even if their bank fails. The FDIC also works to prevent bank failures by monitoring and examining banks to ensure that they are operating safely and soundly.
How does the FDIC protect the banking system?
The FDIC protects the banking system by promoting stability and public confidence in the financial system. The FDIC does this by providing deposit insurance, monitoring and examining banks and resolving failed banks. When a bank fails, like Silicon Valley Bank’s collapse, the FDIC will step in and take over the bank's assets and liabilities. The FDIC will then work to sell the failed bank or merge it with another bank. By resolving failed banks, the FDIC helps maintain stability in the financial system and prevent bank runs.
Are there additional safety nets?
While the FDIC ensures your money will never be lost, Nova Bank offers additional protection plans, like secured checking and savings accounts and enhanced identity theft parameters, to keep your mind at ease.
Your money is safe with Nova Bank!
The FDIC plays a critical role in protecting depositors and the banking system. By insuring deposits, supervising banks, resolving failed institutions, managing deposit insurance funds, and promoting financial education, the FDIC helps ensure that depositors have confidence in the banking system and that the system can weather various economic shocks.
Looking for a secure and trustworthy bank? Become a customer of Nova Bank as we ensure your money is safe up to the full amount.
