What Is the Purpose of the FDIC?

The FDIC helps to insure and protect deposits at banks and financial institutions for a minimum of $250,000. The organization’s purpose is to preserve and promote public confidence in the banking systems throughout the U.S.

The Federal Deposit Insurance Corporation (FDIC) is an independent organization of the federal government. It was created in 1933 after there were thousands of bank failures. Since the FDIC was created, not one person has lost funds they deposited into an insured bank account. There are about $9 trillion of deposits that are insured by the FDIC in the U.S. Nearly all banks and thrifts in the U.S. with insured deposits are insured by the FDIC.

The only funds that are insured by the FDIC are deposits into bank accounts. They do not insure investments, mutual funds or securities, even if they go through the same financial institution. The FDIC also helps to examine thousands of banks in the U.S. to look for safety and security in their daily operations. FDIC chooses some banks to be chartered by the Federal Reserve System, though this is optional.

The FDIC also makes sure banks and savings institutions are following the current consumer protection laws, such as the Truth-In-Lending Act, Fair Debt Collection Practices Law, Fair Credit Billing Act and the Fair Credit Reporting Act.