The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency established by the U.S. Congress to insure deposits in U.S. banks and thrifts (savings and loan associations) in the event of failure of those institutions. You should know that FDIC insurance covers most of the deposits held at the bank up to a maximum of $250,000 per depositor.

When a bank fails, the FDIC steps in and takes possession of that bank’s assets. Typically, the FDIC will try to find another bank to purchase the failed bank's assets. During this process, the deposits at the failed bank continue to be insured up to $250,000 per depositor. When a new bank purchases the assets and liabilities of the failed bank, depositors only need to change the name and logo of the institution on their checks.

The FDIC's deposit insurance coverage is backed by the full faith and credit of the United States government and paid for by the premiums that banks and thrifts pay for FDIC insurance. It’s important to note, however, that FDIC insurance does not protect against losses from declining stock or property values, changing interest rates or foreign exchange rates, or from bank bankruptcy.

The FDIC urges customers to verify that the bank they’re considering depositing money with is FDIC-insured by checking the FDIC Bank Find or calling 1-877-ASK-FDIC (1-877-275-3342). Additionally, you may check the FDIC’s website at www.fdic.gov to learn more about the FDIC.

The FDIC plays an important role in helping to ensure that customers can trust banks with their money and other assets. The agency protects depositors' funds while also helping to maintain stability in the financial system. If you would like to save or deposit money in a bank, it is smart to ensure it is FDIC-insured. That way, in the event your bank fails, you will have the peace of mind knowing that your funds are insured up to legal limits.