What does it mean if an account is "FDIC Insured"?

What does it mean if an account is "FDIC Insured"?

Mitchell Freedman, CPA/PFS (CEO, MFAC Financial Advisors) gives expert video advice on: What kinds of bank accounts should I have?; How do I open a bank account?; How can I compare banks and the services they offer? and more...

Today an individual can have up to 100 thousand dollars in any one financial institution and have insurance from an organization that's a subdivision of the United States government that will guarantee the deposit up to 100,000 thousand dollars for an individual. The insurance is from the - the acronym is the "FDIC" which stands for the Federal Deposit Insurance Corporation, and that's for commercial banks and most banks. This coverage is for any monetary deposit where the bank owes you the money. So it would be a savings account, checking account, money market account, certificate of deposit. Where a lot of people are confused however, is that is doesn't cover other products that you might buy from your bank. So for example if you ended up purchasing a mutual fund from your bank, then that would not be covered by any kind of insurance, and so it is important to understand what your buy - if you don't understand it have it explained. If you still don't understand it don't purchase the product.