Understanding FDIC Coverage.
FDIC deposit insurance can be difficult to understand, but CSBK can help!
What is it: The FDIC (Federal Deposit Insurance Corporation) is an independent agency of the United States government that protects you against the loss of your insured deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
How it works: FDIC deposit insurance covers your deposits dollar-for-dollar, up to at least $250,000. In most instances, the amount an individual depositor can have insured can be increased through account structuring - which means the manner in which your accounts are titled. The FDIC's Electronic Deposit Insurance Estimator (EDIE) is a terrific tool to help determine your specific deposit insurance coverage. For a complete list of covered accounts, visit www.FDIC.gov.
How we can help: CSBK offers complimentary FDIC coverage evaluations; call or visit your local CSBK Banking Center for assistance.
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Do You Need a Checking and Savings Account? Why having both is a good idea.
You probably already know what a checking account and a savings account are — so is it really necessary to have both? The simple answer is: yes.
A traditional checking account typically allows the account holder to take out money frequently, with few or no restrictions on the timing or amount of those transactions. “You could put $1 million in right now, at 11:36, and pull $1 million out at 11:37,” explains William Mahnic, an associate professor of banking and finance at Case Western Reserve University’s Weatherhead School of Management. To make transactions convenient, checking account holders usually can use a checkbook, debit card or mobile apps to make payments.
With a savings account, the assumption is that you’re storing your cash at a financial institution for longer periods than with checking. This type of account is not as easily accessible as a checking account, with the idea that you’re using it for savings and not for spending. There are typically no check-writing privileges or debit cards attached to savings accounts, so the main way to use the money is to transfer it to your checking account beforehand. There are interest accumulations associated with savings accounts. While it may not be very much, there’s still money going into your account for essentially no reason. “Even though rates are very, very low right now, you will get interest,” Mahnic says. It seems like a no-brainer, and experts will agree, but it turns out some customers may not think that way.
According to a Google Consumer Survey for GOBankingRates.com from September of 2015, 62 percent of Americans have less than $1,000 in their savings account, and 21 percent don’t have one at all. And that doesn’t sit well with some experts. Even though checking accounts are seen as more convenient, money can be drawn out quickly by savers themselves, which makes it harder to save. In addition, checking deposits are a ripe target for hackers. Consumer protection laws regarding fraud do protect you, but you could be stuck in a hard place for quite some time. “That’s a lot of blood, sweat and tears, and a lot of time you have to wait,” Mahnic says. “I’d rather have an account that people don’t see when they get a check from me and don’t see when they get an electronic payment from me.”
So why do people shy away from having both a checking and a savings account? If it’s because you deem checking accounts easier to use than savings, then fear not: Experts say it’s easier than ever to have multiple accounts. “Especially now, when it’s so easy with mobile banking, at the same bank you can have several different accounts, and you can probably arrange it in a way that you’re not paying too many fees with direct deposit and such,” says Consumer Reports Senior Editor Jeff Blyskal. Checking and savings accounts are both federally backed via FDIC Insurance, covering your deposits up to $250,000 per person, per account. How you structure your accounts can increase the coverage amount.
At CSBK, we can help you with both. Check out our Simply Free Checking Account, which has no fees no matter what you may keep in the account. No fees for using another bank's ATM. Our Step-Up Savings Account increases the interest paid as your balances increase. And with both, you have full access to all our mobile and online banking products so that managing your accounts is a breeze. Contact us today to learn more about each or click here to make a personalized appointment.