FDIC Limits In Business 

As a business owner, it’s important to understand the FDIC limits for your deposits.

What is FDIC? 

The Federal Deposit Insurance Corporation (FDIC) is an independent agency that provides insurance coverage for deposits made at FDIC-insured banks in case of bank failure. FDIC insurance is a crucial protection for individuals and businesses that keep their money in banks. However, it is important to understand the limits of this insurance coverage, especially for businesses that may have larger deposits. 

What are the limits on FDIC for businesses? 

The standard FDIC insurance limit for deposits in a single account is $250,000 per depositor, per insured bank. This means that if a business has multiple accounts at a single bank, each account is insured up to $250,000. If a business has more than $250,000 in a single account, the excess amount is not insured and would be lost in case of bank failure. 

How to ensure your funds are covered? 

To increase their insurance coverage, businesses can use different ownership categories. For example, the FDIC provides separate insurance coverage for accounts held by different types of business entities, such as corporations, partnerships, and sole proprietorships. Each ownership category is insured up to $250,000 per depositor, per insured bank. 

Another way businesses can increase their coverage is by using multiple banks. If a business has deposits at different banks, its coverage is based on the insurance limit at each bank. For example, if a business has $500,000 in deposits split equally between two banks, each deposit is fully insured up to $250,000. 

It is important to note that FDIC insurance only covers deposits in FDIC-insured banks. Non-deposit investment products, such as stocks, bonds, and mutual funds, are not insured by the FDIC. Additionally, the FDIC does not insure safe deposit boxes or their contents. 

In conclusion, FDIC insurance is an important protection for businesses that keep their money in banks. Understanding the limits of this insurance coverage is crucial for businesses to ensure that their deposits are fully protected in case of bank failure. By using different ownership categories and multiple banks, businesses can increase their insurance coverage and minimize their risk. 

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Angelica Johnson

Professional Bookkeeper at Open Roads Bookkeeping

Angelica Johnson is a professional bookkeeper and owner of Open Roads Bookkeeping. She greatly enjoys helping businesses meet their full potential. Angelica has always loved numbers and spent several years as a middle and high school math teacher. She can use her love of numbers and accounting to clean and organize your books removing the stress from finances and taxes, so you can have more family time.

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