Meaning & use
FDIC
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Meanings
abbreviationproperAmericanfinance
A US government corporation that repays savers when an insured bank fails, up to a fixed amount per depositor.
Grammar: Used like a name, so it takes no article: FDIC protects deposits, not 'the FDIC' when you mean the agency as a legal body, though 'the FDIC' is common in speech.
Patterns
- FDIC insurance
- FDIC-insured accounts
- the FDIC covers something
- backed by the FDIC
The FDIC guarantees deposits up to a set limit, so most ordinary savers do not lose their money if a bank collapses.
When the bank failed, the FDIC stepped in and paid customers within a few days.
Her account is FDIC-insured, which is why she keeps more than a small balance there.
abbreviationuncountableAmericanfinance
The insurance cover itself, or the label on a bank account that has this protection.
Grammar: Often written before a noun with a hyphen: FDIC-insured, FDIC coverage.
Patterns
- FDIC coverage
- FDIC protection
- be FDIC-insured
Check whether the account has FDIC coverage before you move your savings.
Only the first part of his money fell under FDIC protection, so the rest was at risk.
Many online banks advertise that every dollar you deposit is FDIC-insured.
abbreviationproperAmericanfinance
The regulator that supervises many US banks and can close one that is failing.
Grammar: As a supervisor it is the subject of verbs like seize, close, take over.
Patterns
- the FDIC takes over a bank
- the FDIC closes a bank
- be seized by the FDIC
The FDIC took over the troubled lender over the weekend and reopened it on Monday.
Regulators at the FDIC must decide whether the bank can keep trading.
He wrote his thesis on how the FDIC handled bank failures after 2008.
Common combinations
- FDIC insurance
- Deposits here carry FDIC insurance, so your money is protected.
- FDIC-insured account
- She moved her savings into an FDIC-insured account at a local bank.
- the FDIC limit
- Anything above the FDIC limit is not covered if the bank goes under.
- backed by the FDIC
- The loan is backed by the FDIC, which makes it very safe.
- the FDIC takes over
- When a bank runs out of money, the FDIC takes over and protects depositors.
- FDIC coverage
- Ask the branch manager how much FDIC coverage your joint account has.
Synonyms and how they differ
- deposit insurance
- The general term used in any country; FDIC is the name of the specific American scheme, so use deposit insurance when you are not talking about the US.
- federal regulator
- A broader label for agencies that supervise banks; the FDIC is one such regulator, but the phrase does not mention deposit protection.
Word family
- FDIC-insured adjective
- Describes an account or institution covered by this protection.
Commonly confused: FDIC or FDI? FDIC or FHA?
FDIC vs FDI
FDI stands for foreign direct investment, a completely different financial idea; the extra C changes the meaning to a bank regulator.
FDIC vs FHA
The FHA is a housing agency that insures mortgages, not bank deposits, so it appears in property news rather than savings news.
Practice
A savings account is described as FDIC-insured. What does that tell you?
Choose one answer.
FDIC-insured means the deposit-protection scheme covers the balance up to a limit if the bank collapses. Higher interest is a marketing feature, government ownership of banks is a different idea, and no rule stops a bank from closing an account, so those options do not follow from the label.
Make it your own
Write a sentence using “FDIC”, then check it and compare it with the examples above.