The primary reason why banks play primary roles in finance is that they are deemed to be safe. Whenever money is deposited in a bank such as columbia bank aberdeen, it is expected to be safe. Most of this safety comes from government organizations such as the Federal Deposit Insurance Corporation (FDIC).
Given below are more details about the kind of insurance that FDIC provides to the money deposited in banks.
What is FDIC insurance and what it covers
The FDIC is an agency of the government of the United States of America. It protects your bank money deposits from theft institutions and banks themselves. This means that if your money is in an FDIC-insured account if there are any losses, the amount will be reimbursed to you. FDIC insurance is such a positive that most banks use it as a selling point to their clients.
FDIC accounts, however, only cover a small variety of bank accounts such as certificates of deposits. They also cover savings accounts, money market deposit accounts, and negotiable orders of withdrawals. Every FDIC account type has a different upper limit of principal and interest; however, the highest amount is $250000.
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Things that are not covered by FDIC-insurance
As mentioned above, FDIC insures only a limited kind of accounts. Safe deposits, annuities, stocks, money market, funds, T-bills, etc. are not covered under FDIC-insurance.
The National Credit Union Administration covers things that are not insured by FDIC under their National Credit Union Share Insurance Fund.
Depositing money in a bank seems more secure when there is some kind of insurance attached to it. Such insurance would have saved thousands of people from going bankrupt during the Great Depression. Since FDIC is a U.S. government-backed agency, the insurance provided by it holds utmost reliability.