Financial Institutions – The collapse of several banks in March 2023 left depositors worried about how secure their funds were. The issue of deposit insurance has taken on additional significance, especially in light of the actions the Federal Deposit Insurance Corporation (FDIC) has taken to bail out holdings. Therefore, if you have not yet asked if your bank is covered by deposit insurance, it’s time to find out about it.
Which Financial Institutions Can Be Considered Insured?
A financial institution may be regarded as insured if it participates in any program of deposit insurance. In particular, all federally-chartered financial institutions are provided with Federal deposit insurance, which is administered by the FDIC.
All banks and savings institutions covered by this program pay certain premiums to the FDIC, which constitute its funds. Subsequently, if any of the participating banks fail, depositors will have the opportunity to return their savings of up to $250,000. Thus, deposits are insured, but in case of problematic situations, they are returned to depositors not at the expense of taxpayers but at the cost of the banks themselves.
How to Figure Out the Status of Your Bank
Banks that are FDIC-insured usually highlight this when they advertise their services because this undoubtedly enhances their competitiveness in the financial industry. Those banks that do not participate in the insurance program usually bypass this issue in silence in the hope that their customers will not be interested in this either.
Therefore, if you want to check the status of your bank or savings institution, you can go one of 3 ways:
- Call the toll-free directly to the FDIC at 1-877-275-3342;
- Use the search engine “Bank Find” on the official website of the FDIC;
- Check your bank’s website for the FDIC sign.
How Credit Unions Are Insured
FDIC insurance does not cover credit unions because these financial institutions are the responsibility of the National Credit Union Share Insurance Fund (NCUSIF).
This fund protects members’ accounts for the same amount not exceeding $250,000. Therefore, you can be sure that if your credit union participates in the NCUSIF insurance program, your deposits will also be returned to you.
However, credit unions have certain restrictions related to the place of residence of their members. Residents of the United States sometimes cannot join them simply because these unions are situated in other localities.
Therefore, if you need a small loan, you may join the Payday Depot platform. By providing its users with access to a wide network of lenders, Payday Depot gives you the opportunity to compare the conditions of different financial institutions and choose the most profitable ones.
When your savings are insured, you feel more secure because you know that no matter what problems a bank or a savings institution has, they won’t spread on your holdings. Therefore, before opening an account with any of the banks, ask about their policy of deposit insurance.
If you know the signs of a responsible financial institution, loud and flashy advertising won’t be able to force you to take rash action. Your knowledge is your best insurance!