Question

Explain the features of the federal deposit insurance.

Answer 1

When you deposit money with a bank, you 're likely to believe that the money is secure. It's hard for anyone to steal it, it won't be lost if your house burns down, and banks have surveillance measures and contingency plans that are almost impossible for someone to circumvent.

Banks typically invest conservatively, but any investment may lose capital. If the investment of a bank loses so much, the company may not be able to fulfill the demands of customers who want to use the money they have deposited with the bank. If this happens, the bank will collapse.

The purpose of FDIC insurance is to foster trust in the banking system. If your investments are FDIC-insured, the U.S. government is committed to making you whole.

If the insured bank fails or runs out of money, the FDIC must step in and pay any money you owe. However, it is important to ensure that your funds are in the insured bank and that your deposits are below the limits of the FDIC.

Bank failures: if the banks collapse, the FDIC will be involved. The Company handles the cleaning up by seeking another bank to take over the deposits and loans of the collapsed entity. Bank defaults are fairly rare for most customers — mainly due to the FDIC. Customers can usually count on their money and also tend to use the same checks and payment cards.