FDIC Insurance
What does it mean
FDIC Insurance is a valuable deposit protection program provided by the Federal Deposit Insurance Corporation. By paying annual insurance premiums, banks can secure insurance coverage for depositors' funds, safeguarding up to $250,000 per depositor. In the unfortunate event of a bank's closure, this insurance serves as a safeguard for depositors. In such cases, the FDIC insurance steps in, reimbursing depositors for up to $250,000 of their deposits.
Why does it matter
FDIC Insurance offers individuals a sense of immense reassurance. Since banks operate as private entities, it is challenging for the average consumer to directly gauge the bank's responsible management of its business. By having FDIC Insurance, depositors gain an extra layer of confidence, knowing that their deposits (up to $250,000) are guaranteed to be returned to them in the event of the bank's closure. This added level of security brings peace of mind to depositors, solidifying their trust in the banking system.
Other Relevant Terms
Want to Master Banking's Favorite Ratio?
The Debt Service Coverage Ratio (DSCR) is one of banking's favorite ratios. Want to ace it without breaking a sweat? No problem! We've got some simple, no-fuss pointers that will help you nail this ratio every time. You've got this!
Get the Cheatsheet NowNot Finding What You Are Looking For?
Let me know what terms, ratios or content you want to see covered.
Request Term or Ratio
Am I missing a key term or ratio? Let me know what you want to see covered.
Request Content
Do you have a topic idea you'd like to see covered? Send it my way.
Checkout Courses
Enhance your skills through a deeper understanding of your customers' businesses.
A bit about me
Greetings! I'm Clay Sharkey, and there is nothing I like more than assisting others in achieving their goals. I firmly believe that by enhancing a banker's understanding of their customer's' business, they can provide superior service. This superior service, in turn, leads to stronger relationships for the bank, improved performance for the businesses, and better experiences for our communities. Win-win-win.
