How does FDIC deposit insurance work?

The DIF is backed by the full faith and credit of the United States government, and it has two sources of funds: Interest earned on funds invested in U.S. government obligations. The FDIC buys Treasury notes, and the interest on those notes helps the DIF grow. FDIC deposit insurance only covers deposits, and only if your bank is FDIC-insured.

What is a deposit insurance fund?

The two insurers together make the guarantee that any member banks have full deposit insurance on their deposit accounts. Account holders at banks feel more secure if their deposits are insured, and the Deposit Insurance Fund provides the assurance that they are.

How does the Deposit Insurance Fund (DIF) work?

The DIF is funded by insurance payments made by banks. The organization has over 6,000 member banks. The Deposit Insurance Fund (DIF) is a private, industry-sponsored insurance fund that covers all deposits above the Federal Deposit Insurance Corporation (FDIC) limits at member banks.