Understanding What the FDIC Protects

Understanding What the FDIC Protects 

In the wake of the 2023 news storm of some big banks closing their doors, Patriot Bank wants to explain why there is no reason to panic. The Federal Deposit Insurance Corporation (FDIC) automatically insures deposits up to $250,000 per depositor, per FDIC-insured bank, for each account ownership category.

The FDIC is an independent agency of the United States government that was established in 1933, amid one of the most severe banking crises in the nation’s history, to maintain stability and public confidence in the financial system. See how the FDIC protects Patriot Bank’s depositors and the banking system overall.

What is deposit insurance?

FDIC deposit insurance protects bank customers in the event that an FDIC-insured depository institution fails. Since the FDIC provides up to $250,000 per depositor, per FDIC-insured bank for each account ownership category, this means that if a depositor has multiple accounts at one bank, such as a checking account and a savings account, these accounts are insured for up to $250,000 combined. However, if you have a joint account, like a certificate of deposit with your partner, each co-owner is insured up to $250,000 for the combined amount of his or her interests in all joint accounts at the same insured depository institution (IDI). 

Note that the FDIC does not insure investments in stocks, bonds, mutual funds, or annuities. Additional ownership categories include single accounts, certain retirement accounts, employee benefit plan accounts, trust accounts, government accounts and more. 

How does the FDIC protect depositors?

If a bank fails, the FDIC will step in and pay the insured depositors up to the insured amount. The FDIC acts quickly when this happens to ensure that access to your insured deposits is not interrupted. The FDIC also directly supervises and examines more than 5,000 banks and savings associations for operational safety and soundness.

How does the FDIC protect the banking system?

The FDIC protects the banking system by promoting stability and public confidence in the financial system. They do this by providing deposit insurance, and monitoring and examining banks. If a bank fails, like Silicon Valley Bank’s collapse, the FDIC acts swiftly to protect insured depositors by arranging a sale to a healthy bank, or by paying depositors directly for their deposit accounts to the insured limit. 

Your money is safe with Patriot Bank!

The FDIC plays a critical role in protecting depositors and the banking system. By insuring deposits, supervising financial institutions, working to make financial institutions resolvable, and managing receiverships, the FDIC helps ensure that depositors have confidence in the banking system and that the system is equipped to weather various economic shocks. 

Looking for a secure and trustworthy bank? Become a customer of Patriot Bank as we ensure your money is safe up to the full amount.