Fdic Insurance Protection Is Offered For Certificates Of Deposit

Rising from the ashes of the Great Depression, the Federal Deposit Insurance Corporation, or more simply known as the FDIC, was one of the biggest changes that the federal government made to the United States financial landscape in the 1930s. Many people are partially aware that the FDIC provides them with protection against a financial loss in their checking and savings accounts should their bank fail, but some Americans do not realize that the FDIC’s protection extends to certificates of deposit as well. Banking customers should ensure that the bank they invest with not only has the best CD rates but also has FDIC insurance. Banking at a financial institution without FDIC insurance is a recipe for disaster for any investor or banking customer.

What Is FDIC Insurance?

Since 1933, the Federal Deposit Insurance Corporation has insured Americans’ deposit accounts in banks. The FDIC is the federal government agency that supervises the commercial banks in America and insures deposits that are put in financial institutions’ products such as savings accounts, checking accounts, trusts, and certificates of deposit. After recent regulation changes, the FDIC now insures individual accounts up to $250,000 per depositor per bank against bank failure and fraud. In the case of joint accounts, the FDIC can also insure both parties for a total of $500,000 worth of protection in a single account.

FDIC Insurance and Your CDs

In the 1980’s, the FDIC only insured $100,000 per account, but the recent recession brought sweeping financial regulation changes from Washington, D.C. For this reason the FDIC changed their guidelines to meet the needs of America’s banking customers and to ease their fears. A customer can have $250,000 in any individually owned certificate of deposit without fear of losing their money due to a bank failure in addition to their other checking and savings accounts held at the same bank. So, for example, banking customers can have $250,000 in a checking account, another $250,000 in a savings account, and $250,000 in a certificate of deposit and still be under the protection limits of the FDIC.

With FDIC protection, banking customers can be free to search for the best CD rates knowing that their money is secure in the bank with the federal government protecting their assets. Certificates of deposit are a great investing tool for many Americans, and having FDIC insurance protection allows them to invest with peace of mind. Ensure that you only invest in certificates of deposit at banks that are FDIC insured.

By: Hank Coleman

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Hank Coleman is the founder of several financial blogs, focusing on topics such as how to find the best CD rates Always looking for a trusted financial institution for advice and tips he tends to look up information at www.discoverbank.com more often than not.