What does FDIC insure?
A. FDIC insures all types of deposits received by a financial institution in its usual course of business. For example, savings and checking accounts, NOW accounts, Christmas club accounts, and time deposits (including certificates of deposit, “CDs”) are all subject to FDIC insurance coverage. Cashiers’ checks, officers’ checks, expense checks, loan disbursement checks, interest checks, outstanding drafts, negotiable instruments and money orders drawn on the institution are also considered deposits, and so are also protected by FDIC. Collectively, these types of instruments are referred to as “official checks.” For example, a cashier’s check is a type of official check. Certified checks, letters of credit, and travelers’ checks, for which an insured depository institution is primarily liable, also are insured when issued in exchange for money or its equivalent, or for a charge against a deposit account.
