Does federal deposit insurance cover Treasury securities?
Treasury securities (bills, notes, and bonds) purchased by an insured depository institution on a customer’s behalf are not insured by the FDIC. However, they remain the property of the customer. When an insured financial institution is closed and the FDIC is named its receiver, the customer has two options. First, the customer can present a receipt documenting to the FDIC’s satisfaction his or her ownership rights. The FDIC as receiver will give the customer a release that the customer can present to a Federal Reserve Bank or the Department of the Treasury to prove ownership. Alternatively, the FDIC as receiver can hold all Treasury securities and make a distribution upon maturity in the same manner and extent as the closed institution would have done.
