The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. The FDIC was created by the Banking Act of 1933, enacted during the Great Depression to restore trust in the American banking system. More than one-third of banks failed in the years before the FDIC's creation, and bank runs were common. The insurance limit was initially US$2,500 per ownership category, and this has been increased several times over the years. FDIC deposit insurance covers up to $250,000 per depositor, per FDIC-insured bank, for each account ownership category. FDIC insurance is backed by the full faith and credit of the government of the United States, and according to the FDIC, "since its start in 1933 no depositor has ever lost a penny of FDIC-insured funds".
Deposits placed with non-bank fintech (financial technology) companies are not protected by the FDIC against failure of the fintech company. If the company places the money in an FDIC-insured bank account consumers are protected only under some conditions.
The FDIC is not supported by public funds; member banks' insurance dues are its primary source of funding. The FDIC charges premiums based upon the risk that the insured bank poses. When dues and the proceeds of bank liquidations are insufficient, it can borrow from the federal government, or issue debt through the Federal Financing Bank on terms that the bank decides.
, the FDIC provided deposit insurance at 4,336 institutions. As of June 30, 2026, the Deposit Insurance Fund (DIF) stood at $161.1 billion, with a reserve ratio of 1.48%.
The FDIC also examines and supervises certain financial institutions for safety and soundness, performs certain consumer-protection functions, and manages receiverships of failed banks. Quarterly reports are published indicating details of the banks' financial performance, including leverage ratio (but not CET1 Capital Requirements & Liquidity Coverage Ratio as specified in Basel III).
Member bank liquidity requirements To qualify for deposit insurance, member banks must follow certain liquidity and reserve requirements. Banks are classified in five groups according to their risk-based capital ratio: Well capitalized: 10% or higher Adequately capitalized: 8% or higher Undercapitalized: less than 8% Significantly undercapitalized: less than 6% Critically undercapitalized: less than 2%
When a bank becomes undercapitalized, the institution's primary regulator issues a warning to the bank. When the number drops below 6%, the primary regulator can change management and force the bank to take other corrective action. When the bank becomes critically undercapitalized the chartering authority closes the institution and appoints the FDIC as receiver of the bank.
Insurance coverage The FDIC insures deposits at member banks in the event that a bank fails—that is, the bank's regulating authority decides that it no longer meets the requirements for remaining in business.
Covered deposits
FDIC deposit insurance covers deposit accounts, which, by the FDIC definition, include: checking accounts and negotiable order of withdrawal (NOW) accounts (interest-bearing checking accounts with a hold option) savings accounts and money market deposit accounts (MMDAs, i.e., higher-interest savings accounts subject to check-writing restrictions) time deposits including certificates of deposit (CDs) outstanding cashier's checks, interest checks, and other negotiable instruments drawn on the accounts of the bank accounts denominated in foreign currencies Accounts at different banks are insured separately. All branches of a bank are considered to form a single bank. Also, an Internet bank that is part of a brick and mortar bank is not considered to be a separate bank, even if the name differs. Non-US citizens are also covered by FDIC insurance as long as their deposits are in a domestic office of an FDIC-insured bank.
The FDIC publishes a guide which sets forth the general characteristics of FDIC deposit insurance, and addresses common questions asked by bank customers about deposit insurance.
Items not insured Only the above types of accounts are insured. Some types of uninsured products, even if purchased through a covered financial institution, are:
Stocks, bonds, and mutual funds including money funds The Securities Investor Protection Corporation, a separate institution chartered by Congress, provides protection against the loss of many types of such securities in the event of a brokerage failure, but not against a decrease in their values. Exceptions have occurred, such as the FDIC bailout of bondholders of Continental Illinois. Investments backed by the U.S. government, such as Treasury securities The contents of safe deposit boxes. Even though the word deposit appears in the name, under federal law a safe deposit box is not a deposit account – it is merely a secured storage space rented by an institution to a customer. Insurance and annuity products, such as life, auto and homeowner's insurance.
Deposit accounts are insured only against the failure of a member bank. Deposit losses that occur in the course of the bank's business, such as theft, fraud or accounting errors, must be addressed through the bank or state or federal law.
Deposit insurance also does not cover the failure of non-bank entities that use a bank to offer financial services, e.g. fintech financial technology companies. If the company places the money in an FDIC-insured bank account consumers are protected only under some conditions.
Ownership categories Each ownership category of a depositor's money is insured separately up to the insurance limit, and separately at each bank. Thus a depositor with $250,000 in each of three ownership categories at each of two banks would have six different insurance limits of $250,000, for total insurance coverage of $1,500,000. The distinct ownership categories are: Single accounts (accounts not falling into any other category) Certain retirement accounts (including Individual Retirement Accounts (IRAs)) Joint accounts (accounts with more than one owner with equal rights to withdraw) Revocable and irrevocable trust accounts (containing the words like "In trust for", etc.) Employee Benefit Plan accounts (deposits of a pension plan) Corporation/partnership/unincorporated association accounts Government accounts
All amounts that a particular depositor has in one or more accounts within a single particular ownership category at a single particular bank are added together and are insured up to $250,000.
For joint accounts, each co-owner is assumed (unless the account specifically states otherwise) to own the same fraction of the account as does each other co-owner (even though each co-owner may be eligible to withdraw all funds from the account). Thus if three people jointly own a $750,000 account, the entire account balance is insured because each depositor's $250,000 share of the account is insured.
The owner of a revocable trust account is generally insured up to $250,000 for each unique beneficiary (subject to special rules if there are more than five of them). Thus if there is a single owner of an account that is specified as in trust for three different beneficiaries, the funds in the account are insured up to $750,000.
On January 21, 2022, the Board of Directors passed a Final Rule to simplify the Ownership Categories by combining Revocable and Irrevocable Trusts into a single ownership category. The policy came into effect on April 4, 2022.
On April 1, 2024, the Board of Directors changed how accounts held under the same name would be insured.
Funds
The FDIC receives no funding from the federal budget. Instead it assesses premiums on each member and accumulates them in a Deposit Insurance Fund (DIF) that it uses to pay its operating costs and the depositors of failed banks. The amount of each bank's premiums is based on its balance of insured deposits and the degree of risk that it poses to the FDIC.
Funds in the Deposit Insurance Fund that are not otherwise employed must be invested in obligations of the United States or in obligations guaranteed as to principal and interest by the United States. Under the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, the FDIC is required to fund the DIF to at least 1.35% of all insured deposits; in 2020, the amount of insured deposits was approximately $8.9 trillion and therefore the fund requirement was $120 billion.FDIC Annual Report (2020)
During two banking crises—the savings and loan crisis and the 2008 financial crisis—the FDIC expended its entire insurance fund. On these occasions it met insurance obligations directly from operating cash, or by borrowing through the Federal Financing Bank.FDIC Annual Report (1991)FDIC Annual Report (2009) Another option, which it has never used, is a direct line of credit with the Treasury on which it can borrow up to $100 billion.
Between 1989 and 2006, there were two separate FDIC reserve funds: the Bank Insurance Fund (BIF), and the Savings Association Insurance Fund (SAIF). This division reflected the FDIC's assumption of responsibility for insuring savings and loan associations after another federal insurer, the Federal Savings and Loan Insurance Corporation (FSLIC), was unable to recover from the savings and loan crisis. The existence of two separate funds for the same purpose led banks to shift business from one to the other, depending on the benefits each could provide. In the 1990s, SAIF premiums were, at one point, five times higher than BIF premiums; several banks attempted to qualify for the BIF, with some merging with institutions qualified for the BIF to avoid the higher premiums of the SAIF. This drove up the BIF premiums as well, resulting in a situation where both funds were charging higher premiums than necessary.Sicilia, David B. & Cruikshank, Jeffrey L. (2000). The Greenspan Effect, pp. 96–97. New York: McGraw-Hill. .
Then-Chair of the Federal Reserve Alan Greenspan was a critic of the system, saying, "We are, in effect, attempting to use government to enforce two different prices for the same itemnamely, government-mandated deposit insurance. Such price differences only create efforts by market participants to arbitrage the difference." Greenspan proposed "to end this game and merge SAIF and BIF".Sicilia & Cruikshank, pp. 97–98. In February 2006, President George W. Bush signed into law the Federal Deposit Insurance Reform Act (FDIRA). Among other purposes, the act merged the BIF and SAIF into a single fund.
At June 30, 2026, the Deposit Insurance Fund had a balance of $161.1 billion and a reserve ratio of 1.48 percent, up from $157.4 billion and 1.43 percent at March 31, 2026. The year-end balance had increased every year from 2009 through 2022.
Resolution of insolvent banks
Upon a determination that a bank is insolvent, its chartering authority—either a state banking department or the U.S. Office of the Comptroller of the Currency—closes it and appoints the FDIC as receiver. In its role as a receiver the FDIC is tasked with protecting the depositors and maximizing the recoveries for the creditors of the failed institution. The FDIC as receiver is functionally and legally separate from the FDIC acting in its corporate role as deposit insurer. Courts have long recognized these dual and separate capacities as having distinct rights, duties and obligations.