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Important Update: Changes in FDIC Deposit Insurance Coverage

The FDIC deposit insurance rules have undergone a series of changes starting in the fall of 2008. As a result, certain previously published information related to FDIC insurance coverage may not reflect the current rules. For details about the changes, visit Changes in FDIC Deposit Insurance Coverage. For more information about FDIC insurance, go to www.fdic.gov/deposit/deposits/index.html or call toll-free 1-877-ASK-FDIC (1-877-275-3342). For the hearing-impaired, the number is 1-800-925-4618.

Special 10th Anniversary Edition - Fall 2003

One-Stop Shopping Financial Services: An Opportunity for the Informed Consumer
Many banking institutions have become financial supermarkets offering investments and insurance in addition to deposits. Here's how to understand the risks, including knowing what is or isn't FDIC-insured.

Regulatory changes in recent years have allowed FDIC-insured institutions to offer stocks, bonds, mutual funds, annuities, life insurance and other products not traditionally sold by banks. These products can be attractive alternatives to bank deposits because they often provide a higher rate of return. Unlike deposits, however, these other products are not FDIC-insured and, in some cases, could lose value.

"These new products can offer the potential for higher returns than traditional deposits, but consumers need to understand these products, especially the risks, before they make a purchase," says Kate Spears, an FDIC consumer affairs specialist.

Federal law is specific about what is covered by FDIC insurance if an insured banking institution were to fail. Coverage includes checking accounts, savings accounts and certificates of deposit (CDs). What's not insured by the FDIC includes stocks, bonds, mutual funds and annuities.

To minimize potential confusion, banks and savings institutions are required to clearly differentiate FDIC-insured deposits from uninsured investments, both in sales practices and advertisements. For example, when offering or advertising an investment product, FDIC-insured institutions must indicate that the investment is not FDIC-insured, is not guaranteed by the bank or savings institution, and is subject to investment risk, including the possible loss of principal.

Excerpted from "One-Stop Shopping for Financial Services: A Window of Opportunity for the Informed Consumer ," Spring 2001.

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Last Updated 12/12/2003 communications@fdic.gov