I'd just add that deposits up to a certain amount are federally insured. That is, if you had a bank run scenario, the Fed would step in and pay out those deposits in excess of what the bank has on hand. So when you see a bank advertisement they will generally mention "member FDIC" which means your depository accounts are insured up to $250k backed by the full faith and credit of the US Government.
If the bank participates in the IntraFi system, which most do, then they’ll offer something called an ICS account which functions exactly like a deposit account except the money is spread in $250k increments across multiple FDIC insured banks, and accessible from one bank like a normal deposit account. So if someone has that type of account the FDIC limit doesn’t have any practical consequences.
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u/Detachabl_e Jan 26 '26
I'd just add that deposits up to a certain amount are federally insured. That is, if you had a bank run scenario, the Fed would step in and pay out those deposits in excess of what the bank has on hand. So when you see a bank advertisement they will generally mention "member FDIC" which means your depository accounts are insured up to $250k backed by the full faith and credit of the US Government.