FDIC Insurance, SVB & Signature Bank

March 16, 2023

When events like Silicon Valley Bank (SVB) and Signature Bank happen, it's natural to wonder how a bank safeguards your funds. Fortunately, the Federal Deposit Insurance Corporation (FDIC) insurance was designed for this very reason: to help protect your funds once deposited.

The FDIC is an independent government agency that protects bank depositors from the loss of uninsured deposits at an FDIC-insured bank. This organization oversees FDIC deposit insurance, which protects bank customers if an FDIC-insured institution fails. In other words, FDIC insures your money at the bank.

In the event of a bank failure, the FDIC provides depositors with an insurance payout of up to $250,000 per depositor, per institution, and per ownership category. If your bank is an FDIC-insured institution, you don't need to apply for FDIC insurance because coverage is automatic.

With SVB and Signature Bank, banking regulators took the extraordinary step of designating both banks as systemic risks to the financial system, giving regulators flexibility to backstop the uninsured deposits. Regulators hoped that by protecting these deposits, they would bolster confidence in the banking system.

We expect the government’s quick actions will boost trust in the banking system, yet these events may have an impact on longer-term economic growth. I’m keeping a close watch on the situation and plan to provide you with additional updates as the situation evolves.

^{The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.}

^{The Federal Deposit Insurance Corporation (FDIC) protects deposits of up to $250,000 per depositor, per insured bank, for each account ownership category. FDIC covers most, but not all, U.S. banks and savings associations in the event that the institution becomes insolvent. FDIC does not cover securities, mutual funds, or similar types of investments. For more information about FDIC insurance, visit www.fdic.gov.}