FDIC stands for the Federal Deposit Insurance Corporation, a United States government-run insurance fund that insures deposits in banks and savings associations. The FDIC was created by Congress in 1933 through the Banking Act of 1933 to protect depositors from losses due to bank failures. It is an independent agency funded by premiums paid by member institutions and its deposit insurance coverage is backed up by the full faith and credit of the U.S. government.
The FDIC provides protection against loss on deposits held at eligible financial institutions up to specified limits if those institutions become insolvent or otherwise fail, guaranteeing all funds held within those accounts are not lost as a result of such events (up to $250,000 per account type). All domestic banks insured under this program must prominently display their status as FDIC Insured Banks on their website home page or lobby entrance/exit doors so any potential customers can identify them easily before conducting transactions with these organizations.
It’s important for cryptocurrency investors who use traditional banking accounts – like checking or savings – understand how they’re protected when using an institution covered under FDIC regulations since crypto assets do not typically come with similar protections while stored in digital wallets and exchanges which may be subject to hacking attacks, malware threats etc., resulting in permanent loss of coins without recourse available besides filing suit against said organization(s).
