Generally, bank deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain amount per depositor, typically $250,000 per insured bank. Multiple accounts in the same name and in the same bank are combined and insured based on the FDIC standard amount of $250,000. The FDIC does not insure bonds, mutual funds, stocks, life insurance policies, or the like--only checking, savings, and money market deposit accounts, and certificate of deposits.
The Federal Deposit Insurance Corporation (FDIC) began insuring private bank accounts after the crash of the banking system during the Great Depression of the 1930's. It was created for the purpose of insuring funds deposited into bank accounts as a means of restoring confidence in the banking system. Many people are unaware that after you deposit money into a bank account, the bank does not keep your money on reserve for you. Instead, they spend it on investments such as mortgages and business loans. These high-interest investments are how the banks make their money. This being the case, banks have no guarantees that the money will be returned to them, and in the event of a financial disaster, they may never be able to return your money to you. The FDIC is a federally-governed insurance company that oversees these banking and financial institutions and verifies their ability to repay any lost funds.
Current FDIC insurance rates stipulate that for any account that receives more than .25% interest, the FDIC will insure up to $250,000 per bank, per person. This means that in order to be fully insured, you should not have more than $250,000 in any single bank. As of December 31, 2010, and through December 31, 2012, any non-interest bearing accounts, or accounts that make less than .25% interest will receive full insurance regardless of the amount placed into the bank account.
If you are unsure of your investment options or have questions about the FDIC and its ability to insure your money, consult with a banking attorney.