Certainly, the idea of a bank – or banks – closing is unsettling to most people. But it’s important to keep the bigger picture in perspective. As a testament to the stability of the American financial system, no customers of either the recently shuttered Silicon Valley Bank (SVB) or Signature Bank lost one penny of their deposits.
Strong backstops for the banking industry created by the government are the most significant contributors to preventing mass instability and depositor panic nationwide. The best example is the Federal Deposit Insurance Corporation (FDIC), which has been protecting both individuals and commercial clients since being founded in response to widespread bank closures during the Depression. In fact, every FDIC-insured depositor over the last 90 years has been fully covered up to FDIC insurance limits despite literally thousands of institutional failures. In addition, a multitude of banking regulations, though not always 100% effective, continue to provide important guardrails.
How much of your money does the FDIC protect? There are actually two answers here. The FDIC automatically provides (at no cost to you) $250,000 of insurance per depositor, per institution. This coverage includes checking and savings accounts as well as certificates of deposit (CDs) and more. If you have multiple accounts (say, checking and savings), simply total the balances to determine whether all your money is currently protected.
In the event that you do exceed $250,000, options exist. Opening a joint account with a spouse, family member or anyone else provides greater FDIC coverage, raising the maximum limit to $500,000. Or, by placing your deposit funds with multiple banks, you can also protect larger totals.
The bottom line: it’s important to remember that, although your accounts at First Internet Bank are FDIC-insured, when deposits go beyond the $250,000 limit, even more protection is available. Through partnership with IntraFi® Network DepositsSM and their nationwide network of over 3,000 banks, First Internet Bank is able to leverage those resources to offer fully FDIC-insured coverage – even for multi-million dollar CDs and Money Market Savings accounts – and provide complete access to funds for high-dollar deposit customers.
Since opening our virtual doors nearly 25 years ago, First Internet Bank has operated with the financial well-being of personal and business depositors and the security of their accounts as our top priority. To learn more about your FDIC coverage, or how your larger accounts can benefit from extended protection, contact one of our Relationship Bankers to discuss your options.