FDIC

The FDIC is the government agency that insures deposits in banks and thrifts. It’s an independent deposit insurance agency that was created by Congress in 1933 as a way to maintain stability and public confidence in the nation's banking system. 

Historically, the FDIC had protected bank accounts up to $100,000 in the case of bank and savings and loan failures.  However, when the economic crisis did indeed cause some financial institutions to fail, fearful consumers began to withdraw their money from bank accounts forcing Congress to pass an emergency rescue plan. 

As part of that plan, the FDIC has temporarily raised the maximum amount it will repay depositors from $100,000 to $250,000. If a customer has accounts at more than one bank, each account is now insured up to $250,000. For joint accounts in which both people have equal rights of withdrawal, the insured limit is $500,000. These higher limits are set to expire at the end of 2009.