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Understanding FDIC Insurance: What’s Covered and What’s Not
August 15, 2025
If you’ve ever walked into a bank or visited a bank’s website, you’ve probably seen the phrase “Member FDIC” or “FDIC-Insured.” But what does that actually mean? And more importantly, how does it protect your money?
At Peoples Savings Bank, we believe in transparency and helping you feel confident about where your money is and how it’s protected. Here’s a clear breakdown of what FDIC insurance is, what it covers, and what it doesn’t.
What Is the FDIC?
FDIC stands for the Federal Deposit Insurance Corporation. It’s an independent agency of the U.S. government, created in 1933 during the Great Depression to restore trust in the American banking system.
Its primary role is to protect your deposits in the unlikely event that a bank fails. If your FDIC-insured bank were to close tomorrow, the FDIC ensures that you would get your insured funds back, up to the coverage limit.
How FDIC Insurance Works
FDIC insurance covers up to $250,000 per depositor, per insured bank, per ownership category.
- Per depositor – This limit applies to each individual or business account holder.
- Per insured bank – If you have accounts at multiple FDIC-insured banks, each bank is insured separately.
- Per ownership category – Categories include single accounts, joint accounts, certain retirement accounts, and more.
For example, if you have a joint account with another person, each of you is insured up to $250,000, meaning that account could have up to $500,000 in FDIC protection.
What FDIC Insurance Covers
FDIC insurance protects your money in most standard deposit accounts, including:
- Checking accounts
- Savings accounts
- Money market deposit accounts (MMDAs)
- Certificates of deposit (CDs)
- Certain retirement accounts (such as IRAs held in deposit accounts)
Example: If you have a savings account at Peoples Savings Bank with $5,000 and a CD with $10,000, both are fully protected by the FDIC, up to the $250,000 limit.
What FDIC Insurance Does Not Cover
FDIC insurance does not protect:
- Stocks, bonds, or mutual funds
- Cryptocurrency or digital assets
- Life insurance policies or annuities
- Municipal securities
- Safe deposit box contents
- S. Treasury securities (though these are separately backed by the U.S. government)
In short, if it’s an investment product or not a traditional deposit, it’s probably not covered by the FDIC.
How to Make Sure You’re Fully Covered
If you have deposits that could exceed $250,000, consider these strategies:
- Know the limits – Remember, $250,000 is per depositor, per insured bank, per ownership category.
- Spread your deposits – If you have more than the limit, you can open accounts at multiple FDIC-insured banks.
- Use different ownership categories – For example, an individual account and a joint account each have their own $250,000 coverage limit.
- Ask your banker – Not sure if your account qualifies? At Peoples Savings Bank, our team can review your accounts and help you structure them for maximum protection.
Why FDIC Insurance Matters
FDIC insurance offers something invaluable: peace of mind. It means your money is safe even in the unlikely event of a bank failure. That security allows you to focus on your financial goals without worrying about losing your hard-earned savings.
At Peoples Savings Bank, we’re proud to be a Member FDIC, and we’re committed to helping you make smart, informed financial decisions, whether you’re opening your first savings account or managing a growing portfolio.
Have More Questions?
We’re here to help. Stop by your local Peoples Savings Bank branch or contact us online to learn more about FDIC insurance and how to keep your money fully protected.
Peoples Savings Bank Member FDIC.