CHARLOTTE, N.C. — The Silicon Valley Bank collapse affected many businesses and individuals. However, people with accounts at that bank were automatically protected, up to $250,000. All because of the Federal Deposit Insurance Corporation or FDIC. Some are wondering how does the FDIC work?
The Federal Deposit Insurance Corporation has been around since the 1930s. It's a government-backed corporation that helps people get their money back, up to $250,000 per depositor, if the bank goes under.
SOURCES:
THE QUESTION:
Does the FDIC cover all account types?
THE ANSWER:
No, it does not cover all account types.
WHAT WE FOUND:
According to the FDIC, it will only cover certain deposit accounts like checking and saving accounts, money market deposit accounts and certificates of deposits, cashier's checks and money orders.
"It doesn’t cover stock investments, bond investments," Banerjee said.
The FDIC does cover qualifying deposits in some retirement accounts like traditional IRAs, Roth IRAs, and self-directed 401k plans.
THE NEXT QUESTION:
Are all banks insured by the FDIC?
THE ANSWER:
No, not all banks are insured by the FDIC.
"Most of the larger banks would be insured by FDIC Insurance," Banerjee said.
Those that pay for that coverage.
"Banks who receive that service will pay an insurance premium to FDIC so that’s the FDIC deposit fund to pay out to depositors when banks fail," Chu said.
According to the FDIC, not all banks and credit unions are covered however, many Credit Unions are covered by the National Credit Union Administration and work in a similar way as the FDIC.
More information and banks that are covered.
Contact Meghan Bragg at mbragg@wcnc.com and follow her on Facebook, Twitter and Instagram.
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