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Understanding Deposit Insurance - Financial Regulation

Maryland law requires all banks to be federally-insured by the Federal Deposit Insurance Corporation (FDIC) and all credit unions to be either federally-insured by the National Credit Union Administration (NCUA) or to have private share insurance. The FDIC and the NCUA are independent federal agencies and their insurance is backed by the full faith and credit of the United States government. No depositor with funds insured by the FDIC or NCUA has ever lost money.

What is deposit insurance?

Deposit insurance protects bank or credit union customers with deposit accounts (“depositors”) in the event that their financial institution fails. If the bank or credit union stops operating, deposit insurance makes sure that depositors’ money remains available to them. 

The types of accounts that are covered by deposit insurance include: checking accounts; savings accounts; money market accounts; certificates of deposit; certain types of retirement accounts including IRAs; revocable and irrevocable trust accounts; and corporation, partnership and unincorporated association accounts. 

The standard insurance amount is $250,000 per depositor, per insured financial institution, for each account ownership category (such as single or joint ownership). Bank and credit union depositors don’t have to purchase deposit insurance – if a deposit account is opened in an insured financial institution, the account is automatically covered. Depositors with account balances greater than $250,000 may discuss options for expanded deposit insurance coverage with their financial institution.

How does deposit insurance work?

Deposit insurance is normally paid to depositors the next business day after a bank or credit union closes. However, payment may take extra time if the insurer needs more information to determine the actual amount of coverage and in those cases the insurer will contact the depositor. The depositor will either be issued a check for the insured balance of the account, or provided with a new account at another insured financial institution in an amount equal to the insured balance of their account at the failed institution.

Are Maryland banks and credit unions a safe place for deposits?

Yes. Customer deposits at all Maryland banks and credit unions are protected by deposit insurance. 

More Information

Visit the FDIC’s website at to learn more about bank deposit insurance.

Visit the NCUA’s website at to learn more about credit union share insurance.

Contact your financial institution directly if you have questions about your accounts or your deposit insurance.