How the FDIC protects your savings?
Even if your bank crashes down, the FDIC Insurance can effectively protect your savings. Investors consider banks as a safe haven for their hard-earned savings and capitals. The banks on the other hand loans out the money and invests it in a variety of projects. If any of these activities goes haywire, the money deposited by you may well face the danger. Under such circumstances, the FDIC Insurance offers security and helps the bank to shield your cash from any probable damage.
The FDIC covers deposits that fall under the category of Checking accounts, Savings accounts CDs and Money market accounts. Here, one needs to note that the money market funds are not covered by the FDIC. This insurance cover is not extended to the safety deposit box contents, the investments like the mutual funds or stocks and the insurance products of the likes of annuities. Further, the products mentioned above do not fall under the category of deposits. This is in spite of the fact that, these products might have been bought from the bank. The credit unions also do not fall under the purview of the FDIC Insurance.
The basic insurance limitations are:
- Every depositor can have up to $100,000, covered.
- For a retirement account, the depositor can have $250,000.
These limits can vary again with the different banking institutions. The depositor can well increase his coverage by going for multiple bank accounts.