“Hey Dad, is my money safe in a bank savings account?”
Well kids, it depends:
Your money is safe in a bank savings account, at any Bank that is “FDIC” insured. Your money is also safe in any Credit Union savings account that is “NCUA” insured, however we will discuss NCUA insurance in a separate conversation.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation supplying deposit insurance to depositors in American commercial banks and savings banks. It ensures that money deposited by you, the “depositor”, is safe from loss due to bank failures. This has been true since FDIC insurance was created in 1934.
Now, back to, “it depends”. FDIC Insurance is only available at banks that are federally insured. As you may have guessed already, not all banks are federally insured. If a bank is federally insured, it will display one of the FDIC insurance logos on its website. (Example: Member FDIC)
Additionally, the FDIC insurance only insures deposits up to $250,000 per depositor. If you have more than that to deposit, first, Congratulations! “Second, kids, we need to talk!” Third, there are available options to protect amounts over $250,000 through FDIC insurance. The first option is to divide the money up between multiple FDIC insured banks, making sure that no one bank has more than $250,000 of your money deposited in a savings account there.
One other option that is not frequently discussed is the “Joint” account, which is one of the FDIC insurance ownership categories, in addition to an “Individual” account. A married couple utilizing a combined individual and joint account strategy could be FDIC insured up to $1,000,000 at the same Bank.
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