> It’s not backed.
Then again, neither is a typical bank account.
Then again, neither is a typical bank account.
The only similar is that they are guarantees.
The FDIC can't run out of money because Congress would just re-fund it in the unlikely (and extreme) event that its current funding ran out.
Bank accounts with FDIC insurance are literally backed by the people who create dollars.
Banks are backed by FDIC insurance which, although it has been able to pay each claim ever filed, did get cold feet in the 2015 crisis and obviously does not hold a dollar for each insured dollar. In fact some cursory research shows they hold about $6 for every $10000 and in a major collapse like the 2015 crisis, which could have been even worse, they could very well get in trouble.
Source: https://www.fdic.gov/resources/deposit-insurance/faq/index.h...
> Deposits are insured up to at least $250,000 per depositor, per FDIC-insured bank, per ownership category
If you want have more than $250k insured in regular accounts, spread it across multiple banks (or put some in a joint acct, but that has its own risks).
Opening a chequing account and a savings account at the same bank doesn’t give you $500k of coverage if you were to put 250k in each.