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You have a legal contract with FDIC which insures all deposits upto $250K is what I know. If the bank goes bust FDIC owes you your money under 250K.

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I don't think individual deposit holders technically have a legal contract with the FDIC. Are you sure? Do you have any sources on that?

You are right in practice that the FDIC guarantees small deposits.

You are right. There is no legal contract, it's an insurance policy. In practice this is as good as having a legal contract is what I meant.

In practice it's probably better than a legal contract for a small time depositor in some ways, because there's lots of political pressure on FDIC to make good on that.

If it was just a legal contract, in the worst case you'd have to sue to hold them to account.

(On the other hand, politics can change from one day to the next; but contracts are harder to unilaterally change.)

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