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Allegedly, the banker squirmed around before finally saying that the FDIC had 20 years to pay people back. This is not true. They will then auction the assets and liabilities of the failed bank to recover funds, often with extra financial incentives. This has been the case for almost all bank failures since the financial crisis. If a resolution cannot be fully met with an auction, the FDIC will reimburse all insured deposits directly from the insurance fund.
Coverage can span many types of deposits, such as checking and savings accounts, money market accounts, certificates of deposit and more. On the other hand, FDIC insurance does not cover other types of investments such as stocks, bonds, mutual funds, life insurance, or annuities. When your business needs absolute certainty that its cash is safe , make sure its investments are covered by FDIC insurance. Without such systems, the American financial sector, and thus the entire economy, could suffer.
The second is to make sure depositors are protected up to the insurance limits. It does this in one of two ways. In most cases, the FDIC works with a healthy bank to assume the insured deposits of the failed financial institution. The FDIC does not protect depositors against loss from cybercrime or other fraud. The banks themselves are responsible for insuring against such theft losses, whether physically at the bank or in cyberspace.
The FDIC protects your deposit accounts, not your investments. The deposit account ownership categories include:. Your money would be covered up to the insurance limit per depositor for each ownership category at each bank. In addition to protecting your deposits and contributing to the overall safety of the U. The FDIC website also can satisfy your curiosity about banks that have failed , as well as offering you the contact info you need either to submit a complaint or to learn more.
For U. She has worked as a personal finance editor, writer, and content strategist covering banking, credit cards, insurance and investing. As a small business owner and former financial advisor, Daphne has first-hand experience with the challenges individuals face in making smart financial choices.
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