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Insured Financial Institutions

Insured financial institutions, such as a bank, operate under federal and state laws and regulations. They accept deposits, make loans, pay checks, and provide other financial services.

Your deposits in banks are guaranteed by the Federal Deposit Insurance Corporation (FDIC). This means that if the bank were to fail, your money, up to the insured amount, would be returned to you by the FDIC. You can verify if the FDIC insures a bank by visiting

Financial Tip: The FDIC has an online tool called the Electronic Deposit Insurance Estimator (EDIE). It lets you calculate the insurance coverage of your accounts at each FDIC-insured institution. You can find EDIE at the following website:

Reasons to keep your money in a bank

People keep their money in banks for many reasons:

  1. Safekeeping. If you keep your money at home, it could get lost or stolen or worst of all destroyed in a fire.
  2. Convenience. Get cash out whenever you want using an ATM. ATMs are everywhere, and most of them can be used 24 hours a day, 7 days a week. You can also buy things using your debit card if you don’t have cash. Checking accounts typically include capabilities like direct deposit where paychecks can be electronically deposited into your bank account, and the funds are available sooner than if you deposit checks in person.
  3. To save money. Using a bank is much cheaper than cashing paychecks at check-cashing services. Check-cashing services typically charge a fee each time you cash a check. With a checking account at bank, you can deposit your paychecks into your account without a fee.
  4. Security. The FDIC insures deposits up to the maximum amount allowed by law. This means that if for some reason the bank closes and cannot give you the money you had in your account, the FDIC will return the money to you. Also, federal consumer protection laws protect you when you do business with a bank. You can contact the FDIC for assistance if you can’t resolve a dispute with your bank.
  5. Build a solid financial future. Opening an account can help you build a relationship with the bank that can be important for accessing credit. If you ever need a car, home, or small business loan, you’ll be glad you established a good relationship with your bank.