FDIC

The Federal Deposit Insurance Corporation (FDIC) is an independent United States federal agency created in 1933 as part of the Banking Act. Its primary mandate is to maintain stability and public confidence in the nation’s financial system by providing deposit insurance and by supervising and resolving insured financial institutions when necessary.

Deposit insurance is the FDIC’s hallmark function. It protects deposits at FDIC‑insured banks and savings institutions up to $250,000 per depositor, per insured bank, for each account ownership category. Coverage applies to various ownership types, including individual and joint accounts, retirement accounts, and certain trust arrangements, subject to the statutory limits. The Deposit Insurance Fund (DIF), financed by premiums paid by insured banks and by interest earnings, funds insured deposits and, when needed, the resolution of failing banks.

In resolving bank failures, the FDIC acts as receiver and seeks to protect insured deposits, either by arranging an acquisition of the failing bank by a healthy institution or by paying insured depositors directly. The goal is to minimize disruption to the financial system and the broader economy, while preserving value for creditors and other claimants.

Governance and funding: The FDIC is governed by a five‑member Board of Directors, appointed by the President and confirmed by the Senate. The agency operates funded by the DIF rather than general tax revenues. It also cooperates with other federal and state regulators to supervise and regulate insured institutions and to promote consumer protection and financial education.