What Is the FDIC?

The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that insures deposits in banks and savings associations against bank failure. Established in 1933, the FDIC aims to maintain stability and public confidence in the U.S. banking system. Since its inception, no depositor has lost insured funds due to a bank failure.

How IRA FDIC Insurance Works

FDIC insurance covers your IRA deposits dollar-for-dollar, including interest, in the event of a bank failure. This insurance is automatic and free for depositors, as banks pay for the coverage. However, it does not cover losses from theft or fraud.

Is Your IRA FDIC-Insured?

To determine if your IRA is FDIC-insured, consider the following:

Is Your IRA at an FDIC-Insured Bank?

FDIC insurance only applies to deposits at FDIC-insured banks and savings associations. If your IRA is held at a credit union or an investment company, it may be insured by other entities like the National Credit Union Association (NCUA) or the Securities Investors Protection Corporation (SIPC).

Is Your IRA a Deposit Account?

FDIC insurance covers deposit products such as checking, savings, money market deposit accounts, and certificates of deposit (CDs). It does not cover investments like stocks, bonds, mutual funds, crypto assets, life insurance, annuities, municipal securities, safe deposit boxes, or U.S. treasury bills, bonds, or notes.

How FDIC Coverage Limits Work

The FDIC insures up to $250,000 per depositor, per FDIC-insured bank, and per ownership category. This means:

• $250,000 per depositor: Individual accounts are insured up to $250,000. Joint accounts with a spouse are insured up to $500,000.
• $250,000 per bank: You can increase your coverage by opening accounts at different FDIC-insured banks.
• $250,000 per ownership category: Different ownership categories include single accounts, IRAs, joint accounts, trust accounts, employee benefit plan accounts, corporate or partnership accounts, and government accounts.

Maximizing Your FDIC Coverage

If your IRA balance exceeds $250,000, consider opening a second IRA at a different bank to ensure full coverage. Although bank failures are rare, it’s wise to protect the full value of your IRA deposits.

The Bottom Line

FDIC insurance provides essential protection for your IRA deposits, but it’s crucial to verify that both your bank and account type are eligible. If you have any doubts, consult your bank or the FDIC for more information.

Contact O1ne Mortgage for Expert Mortgage Services

At O1ne Mortgage, we are committed to helping you secure your financial future. Whether you need assistance with mortgages or have questions about FDIC insurance for your IRA, our team of experts is here to help. Call us today at 213-732-3074 for personalized mortgage services and advice.