An insured bank is a financial institution, such as a bank, savings bank, or trust company, whose deposits are protected by the Federal Deposit Insurance Corporation (FDIC). This insurance guarantees that depositors will receive their money back up to a certain limit if the bank fails. The FDIC plays a crucial role in maintaining public confidence in the U.S. banking system.
The term "insured bank" is primarily used in banking and finance law. It is relevant in contexts such as consumer protection, banking regulations, and financial stability. Understanding whether a bank is insured is essential for individuals and businesses when choosing where to deposit their funds. Users can benefit from legal templates and resources provided by US Legal Forms to navigate banking agreements and related documents.
Here are a couple of examples of abatement:
Example 1: A customer deposits $10,000 in a local insured bank. If the bank were to fail, the FDIC would ensure that the customer receives their full deposit back, up to the insured limit.
Example 2: A small business chooses to open a checking account at an insured bank to benefit from the security of FDIC insurance, protecting their operational funds. (hypothetical example)
The primary statute governing insured banks is the Federal Deposit Insurance Act, which establishes the FDIC and outlines its functions. Additionally, various regulations under the Banking Act and state banking laws may apply.
| Term | Definition |
|---|---|
| Insured Bank | A bank whose deposits are insured by the FDIC. |
| Uninsured Bank | A bank that does not have FDIC insurance, posing higher risk to depositors. |
| Credit Union | A member-owned financial institution that may also offer insured accounts, but typically through the National Credit Union Administration (NCUA). |
If you are considering opening an account, verify that the bank is insured by the FDIC. You can check the FDIC's website or ask the bank directly. For those looking to manage banking agreements or other related documents, US Legal Forms offers templates that can help you navigate these processes. If you have complex banking needs, consulting a legal professional may be advisable.
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The Federal Deposit Insurance Corporation is a government agency that insures deposits in member banks.