FDIC – What it Stands for and How it Stands for You

Customer giving a check to the bank teller.

You’ve probably seen or heard the letters FDIC when it comes to banking. But have you ever stopped to wonder what it means when we say, “Member FDIC”? It’s not just a throwaway line, it’s a promise to you. It’s a promise that your money is safe because your account is backed by the full faith and credit of the US government. What does that really mean though?

What is the FDIC?

The FDIC, also known as the Federal Deposit Insurance Corporation, was established in 1933 during the Great Depression to help stabilize the economy and banking system. It was created as an extra safeguard to protect depositors, like you.

It works alongside other agencies, like the Consumer Financial Protection Bureau (CFPB), to set and enforce safety and soundness standards for banks. They also provide government-backed insurance of covered funds so you can count on the money in your accounts being safe even during times of economic uncertainty. The efforts of the FDIC have helped establish the safe banking environment we have today. Since its founding, no one has lost a cent of insured money.

What Exactly is FDIC Insurance?

When you bank with an FDIC member bank, like Pinnacle Bank, your money in your deposit accounts is guaranteed up to a certain limit. This means in the unlikely event of bank failure or closure you won’t lose it. Plus, this protection is not something you have to opt in or pay for. The Bank pays for its depositors to have this peace of mind.

Coverage is for:

  • Checking Accounts
  • Savings Accounts
  • Money Market Accounts
  • Certificates of Deposit
  • IRAs
  • Trust Accounts

The FDIC will guarantee up to $250,000 per depositor, per insured bank. Plus, different situations can increase the amount of your money that’s insured, such as holding an IRA or Joint Account. Our bankers are happy to work with you to ensure your Pinnacle Bank accounts provide you with the most FDIC coverage possible.

FDIC Insurance Estimator

Are there limitations to FDIC Insurance?

Be aware that the FDIC doesn’t cover financial products like stocks, bonds, mutual funds, life insurance policies, annuities, securities or the contents of a safe deposit box.

Many of those are investment products and their value ebbs and flows with the market. They come with the possible risk of losing your money. If you’re looking for a more stable place to put your funds, one of our FDIC-insured accounts can offer you peace of mind, plus you can earn interest over time on select accounts.

Where do the FDIC funds come from?

Member banks pay insurance dues that are the FDIC’s primary source of income. The FDIC and its reserves are not funded by taxes or public funds.

What other ways is the FDIC working for you?

In addition to insuring your funds and promoting the stability of the banking system, the FDIC also provides a variety of resources to educate, promote economic inclusion and connect people with financial resources. You can check out their website here to take advantage of their tools.

Promoting stability and inspiring confidence is something Pinnacle Bank has always valued. We’re here to make your banking experience both convenient and secure. Offering quality banking products that have the backing of the FDIC is something that we can be proud of.

Visit the FDIC Website