The U.S. Federal Deposit Insurance Corporation (FDIC) is a United States government corporation that provides deposit insurance to depositors in U.S. banks and other financial institutions, protecting their deposits up to $250,000 per account owner in the event of the bank’s failure or insolvency. The FDIC was established by Congress under the 1933 Banking Act and has been operating since 1934.
The FDIC protects deposits held at insured depository institutions against loss due to bank failures, while also promoting public confidence in the banking system as a whole through its consumer protection activities and financial education programs for consumers and bankers alike. It insures deposits made by individuals into member banks, including checking accounts, savings accounts, certificates of deposit (CDs), money market accounts and retirement accounts such as IRAs and Keogh plans up to $250,000 per account owner per institution for each type of ownership category—for example joint ownerships have higher coverage limits than individual ones do ($500k). This limit is subject to change from time-to-time based on inflationary measures taken by Congress. Additionally it covers certain types of trust accounts with ownership rights similar to those enjoyed by an individual investor; however these trusts are often not covered for more than $100k even when owned jointly between multiple parties .
In addition to providing insurance through private funds collected from its member institutions (banks which must pay premiums into this fund), the FDIC may borrow funds from other nations’ central banks if necessary during times of economic crisis or emergency funding needs — although this has never been done before since its establishment in 1934 except during periods related specifically related the 2008 Financial Crisis where it borrowed approximately 50 billion dollars over two years time period spanning 2008 – 2010 which were paid back entirely with interest within 3 years same period ending 2011 . In most cases though any losses incurred would be covered by fees assessed on all banks participating in this system prior mentioned; creating sort self sustaining fund itself used only when absolutely needed .
When a customer opens an account at an insured bank they will receive confirmation that their funds are indeed protected should anything happen to their bank – either through mail , email or paper documents depending upon agreement between them & institution – thus allowing customers peace mind knowing that even worst case scenario can still have access hard earned money without worry about losing any part thereof .