FDIC Insurance Guide: Protecting Your Money Market Investments

Published: May 27, 2024 | Updated: May 27, 2024

What is FDIC Insurance?

The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects depositors against the loss of their insured deposits if an FDIC-insured bank fails. This insurance is crucial for money market account holders as it provides peace of mind and financial security.

Coverage Limits and Details

FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. This means you can have multiple accounts at the same bank and still be fully insured, as long as they're in different ownership categories.

How FDIC Insurance Works

When you open a money market account at an FDIC-insured bank, your deposits are automatically insured. There's no need to apply for coverage or pay any fees. The insurance is backed by the full faith and credit of the United States government.

What's Covered

• Checking accounts
• Savings accounts
• Money market accounts
• Certificates of deposit (CDs)
• Negotiable order of withdrawal (NOW) accounts

What's Not Covered

• Stocks and bonds
• Mutual funds
• Life insurance policies
• Annuities
• Safe deposit boxes

Maximizing Your FDIC Coverage

To ensure your money is fully protected, consider these strategies:

• Spread large deposits across different ownership categories
• Use multiple FDIC-insured banks
• Understand the different ownership categories
• Keep track of your total deposits at each bank

Verifying FDIC Insurance

Before opening a money market account, verify that the bank is FDIC-insured. You can:

• Look for the FDIC logo at the bank
• Check the FDIC's BankFind tool online
• Ask a bank representative
• Call the FDIC directly