No institution is truly safe. Anything can happen in today’s tumultuous economy. Fortunately, we don’t have to lose too much sleep, as the Federal Deposit Insurance Corporation (FDIC) provides us with protection. This protection is limited, however. The current FDIC insurance limit is $100,000 per deposit for individual bank accounts. Retirement accounts, such as an Individual Retirement Account (IRA) provide protection of up to $250,000.

The U.S. Government created the FDIC in 1933 to restore the public’s confidence in the U.S. banking system after the widespread bank failures of the Great Depression. Despite the word “federal” in the FDIC’s name, the FDIC is a corporation funded by the insurance premiums banks pay for the coverage.

Not all types of accounts are covered by FDIC insurance. The insurance covers checking and savings accounts, money market deposit accounts, certificates of deposit, and outstanding cashier’s checks. It does not insure money in stocks, bonds, mutual funds, annuities, or life insurance policies, or the contents of safe deposit boxes.

As long as the total amount of money you deposit in any number of accounts in just your name at one bank totals less than $100,000 your money is fully insured by the FDIC.