Investing in Cash

Banks and Credit Unions

What is the Federal Deposit Insurance Corporation (FDIC)?

The FDIC was created in 1933—during the Great Depression—to fight the effects of thousands of bank failures that happened in preceding years. It protects depositors up to $250,000 per account holder at each institution, and guarantees this amount for every depositor at every FDIC-insured institution in the United States. If a bank fails, the FDIC is the receiver entrusted to pay all eligible depositors up to this amount, as well as handle the liquidation of all assets owned by the failed institution, combining them with healthier banks when possible, or selling them off entirely. This insures that all Americans have complete trust in the banking system and liquidity, and know their deposits are backed by the U.S. government.


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