Definition
Government protection for bank deposits, from the FDIC (Federal Deposit Insurance Corporation), covering up to $250,000 per depositor, per insured bank, per ownership category.
The story
If an insured bank fails, the FDIC makes sure covered deposits are paid back. It covers checking, savings, money market deposit accounts and CDs (certificates of deposit), but not stocks, bonds, mutual funds or crypto, even if you bought them through a bank. Credit unions have similar coverage through the NCUA (National Credit Union Administration).
Why markets watch it
Deposit insurance is why a bank failure doesn't have to mean savers lose their money.
See it in the story
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms