**The agency that protects commercial bank deposits is the Federal Deposit Insurance Corporation (FDIC).** Established in 1933 in response to the widespread bank failures during the Great Depression, the FDIC provides deposit insurance to ensure the safety and stability of the banking system.
1. How does the FDIC protect commercial bank deposits?
The FDIC protects commercial bank deposits by insuring them up to $250,000 per depositor, per insured bank.
2. Are all commercial banks insured by the FDIC?
Not all commercial banks are insured by the FDIC. Only banks that are members of the FDIC are eligible for deposit insurance coverage.
3. What types of accounts does the FDIC insure?
The FDIC insures all types of deposits received at insured banks, including checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs).
4. Are my deposits safe if my bank is a member of the FDIC?
Yes, as long as your deposits are under the insurance limit of $250,000 per depositor, per insured bank, they are safe and protected by the FDIC.
5. What happens if my bank fails?
If your bank fails, the FDIC steps in to pay depositors the insured amount of their deposits, up to the insurance limit of $250,000 per depositor, per insured bank.
6. Can I increase my deposit insurance coverage beyond $250,000?
Yes, you can increase your deposit insurance coverage beyond $250,000 by opening accounts at multiple FDIC-insured banks.
7. Are my investments, such as stocks and bonds, insured by the FDIC?
No, the FDIC only insures deposits in commercial banks, not investments such as stocks, bonds, mutual funds, or annuities.
8. Do credit unions have the same deposit insurance as commercial banks?
Credit unions are insured by the National Credit Union Administration (NCUA), which provides similar deposit insurance coverage as the FDIC for credit union deposits.
9. Are online banks insured by the FDIC?
Yes, as long as the online bank is a member of the FDIC, deposits held in online bank accounts are insured up to $250,000 per depositor, per insured bank.
10. Does the FDIC protect against losses due to investment risks?
No, the FDIC only protects against losses due to bank failures and does not protect against losses due to investment risks in products like stocks or mutual funds.
11. Can foreign banks operating in the U.S. be insured by the FDIC?
Foreign banks operating in the U.S. can be insured by the FDIC if they meet the regulatory requirements and are approved for FDIC membership.
12. Is the FDIC a government agency?
Yes, the FDIC is a government agency that operates independently as an entity of the federal government to protect depositors and maintain confidence in the banking system.