What Does FDIC Mean?

May 17, 2013 | By More
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Federal deposit insurance corporationOver the years I’ve been in the habit of keeping certain things in my car.  I’m of the attitude “just in case I need it” so I’ll be prepared.  I’ve got an extra baseball hat in my car trunk should I want to take a walk in the midday bright sunshine.  (I don’t always wear sunglasses and besides, I adore wearing hats).  I also throw a light jacket in the car on nice days in case it gets cold later.  Planning ahead even on the little things can make life just a tad less complicated.  In a word, it’s putting certain protections in place to give me peace of mind.

It was back in 1933 that an independent agency of the U.S. federal government was started to really serve a similar purpose – to give peace of mind to bank depositors.  The agency that was created is called the Federal Deposit Insurance Corporation or “FDIC.”  The FDIC was created because of the many bank failures that occurred during the 1920s and 1930s.  Prior to the existence of the FDIC, if you had money in a bank that failed, your savings were long gone.

Today, the FDIC “insures the deposits in banks and thrift institutions for at least $250,000.”  According to the FDIC, “no depositor has lost a single cent of insured funds as a result of a failure.”  Now, that certainly can bring peace of mind to customers keeping money in a bank.  (1)

We are going to discuss the history and various aspects of the FDIC in coming Posts.  As a money-smart consumer, it will be very important to have an understanding of the FDIC and its role in the banking industry and to the consumer.

Homework:

As a way of introduction, your homework today is to visit the FDIC website and read the one page article “Who is the FDIC?”.

Also, we referenced the notices you need to see at a bank.  The FDIC notice is one of those if a bank is insured by the FDIC.  See the Post at:  Public Notices You Should See At a Bank.

Endnotes:

(1)  www.fdic.gov/about/learn/symbol/index.html.

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Category: Banking, FDIC, New to Banking

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