You’ve probably heard the phrase “Member FDIC” and it sounds like a good thing, but what exactly does it mean? In short, a member of the FDIC is a banking institution that pays a premium for all the money deposited by its customers to a federal agency that insures the money is there to stay, no matter what happens to the bank.

Before the Federal Deposit Insurance Corporation (FDIC) was created as part of the Banking Act of 1933, there was nothing to guarantee that your money was safe in most banks. After the market crash of 1929, thousands of banks did fail and depositors were left penniless. Now the FDIC insures deposits in banks and thrift institutions for at least $250,000. Though banks have failed since 1934 when the FDIC became effective, no depositor has lost any insured funds. This is a good thing and gives consumers confidence in the financial stability of the United States.

The FDIC also protects consumers by regulating and examining many financial institutions for solvency which is the ability for the financial institution to meet its long-term financial obligations. When needed, the FDIC can step in to buy up or take over troubled banks. Knowing your money is “backed by the full faith and credit of the United States government”, according to the FDIC seal, this helps you breathe a sigh of relief. It is also a safety measure that helps prevent another Great Depression.

Though the vast majority of banks in the US are FDIC insured, it is worth verifying, especially when dealing with online banking, that your deposits are insured in any institution you choose to do business with. If they are not insured, it is wise to move onto another more secure financial institution choice. Then, once you choose the right bank for you, make sure you save on your personal checks by purchasing them from a company like www.BradfordExchangeChecks.com.