The FDIC website at www.fdic.gov states that:
“The FDIC is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. FDIC insurance is backed by the full faith and credit of the United States government. Since the FDIC was established in 1933, no depositor has lost a penny of FDIC-insured funds.
FDIC insurance covers all deposit accounts, including:
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit
FDIC insurance does not cover other financial products and services that banks may offer, such as stocks, bonds, mutual funds, life insurance policies, annuities or securities.
The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
As it applies to homeowner associations, the FDIC limit of $250,000 is per Taxpayer Identification Number. In other words, an association should not have more than $250,000 in any one FDIC insured bank, including branches of the same bank. Significant amounts in excess of the $250,000 FDIC limit would likely be noted in the independent auditor’s report.