How Are Bank Accounts Insured in the Event of Theft or Natural Disaster?


Quick Answer

Bank accounts are insured by the Federal Deposit Insurance Corporation in case of theft, natural disaster, bank failure or other unforeseen circumstances, according to Wells Fargo Bank. FDIC insurance covers savings accounts, checking accounts and additional types of deposit accounts.

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How Are Bank Accounts Insured in the Event of Theft or Natural Disaster?
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Full Answer

The other accounts covered by the insurance program include money market deposit accounts, negotiable order of withdawal accounts, and time deposits such as certificates of deposit, according to the FDIC. Also covered are money orders and cashier's checks issued by member banks.

The standard deposit insurance amount is $250,000 per depositor, per insured bank for each account ownership category, as stated by the FDIC. This means that a customer with two or more accounts in the same bank might be eligible for a total of over $250,000 in insurance at that bank.

Ownership categories include single accounts, joint accounts, revocable trust accounts and irrevocable trust accounts, as described by the FDIC. Other ownership categories are government accounts, employee benefit plan accounts, certain retirement accounts and corporation/partnership unincorporated association accounts.

The FDIC does not insure non-deposit investment products from banks. These include mutual funds, stock investments, bond investments, municipal securities and life insurance policies. The FDIC provides no coverage for safe deposit boxes or their contents. The same holds true for U.S. Treasury bills, bonds and notes, according to the FDIC.

The FDIC was formed in 1933 as an independent agency of the U.S. government. During the Great Depression, the federal government wanted a way to guarantee the safety of bank deposits, according to Wells Fargo Bank.

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