Examining the FDIC
The FDIC logo is plastered in banks nationwide. We hear of banks and thrift institutions being “FDIC insured.” But what does it mean and why should we care?
FDIC stands for Federal Deposit Insurance Corporation. The overarching goal of this organization is to preserve and promote the public’s confidence in the U.S. financial system by insuring deposits in participating banks and thrift institutions for at least $250,000. The organizations works diligently to identify, monitor, and address risks to deposit insurance funds. The essential goal is to limit the effect on the economy and financial systems when a bank or thrift institution fails.
The FDIC was created in 1933 in response to Black Friday and the crash of the economy in the 1920s and 1930s. “Since the start of FDIC insurance on January 1, 1934, no depositor has lost a single cent of insured funds as a result of failure” (https://www.fdic.gov/about/learn/symbol/
). Only deposits are insured under the FDIC; all securities or mutual funds are not covered. The FDIC insures approximately $9 trillion of deposits throughout the nation, which is virtually every bank and thrift institution.
The FDIC logo has come to represent an image of safety for consumers and citizens in the financial realm. They have been stabilizing the financial economy to the best of their ability since foundation.
Employing more than 7,000 people, the organization is managed by five Board of Directors, all of which are appointed by the President of the United States of America and confirmed by the Senate. The headquarters is located in Washington D.C. but has six regional offices and multiple field offices nationwide. It is funded by premiums the banks and thrift institutions are required to pay for the deposit insurance coverage as well as earnings on investments.
FDIC’s logo has come to represent the idea of a safe and secure financial institution. It is an organization that promotes trust and has established a confident reputation amongst consumers. So the next time you see the FDIC logo while you are at the bank, know that your deposits are insured strengthening your financial security.