Federal Deposit Insurance Corporation definition of Federal Deposit Insurance Corporation in the Free Online Encyclopedia.

Federal Deposit Insurance Corporation (FDIC), an independent U.S. federal executive agency designed to promote public confidence in banks and to provide insurance coverage for bank deposits up to $100,000. The corporation was established in 1933 to prevent a repetition of the losses incurred during the Great Depression Great Depression, in U.S. history, the severe economic crisis supposedly precipitated by the U.S. stock-market crash of 1929. Although it shared the basic characteristics of other such crises (see depression ), the Great Depression was unprecedented in its length and
..... Click the link for more information. when bankrupt banks could not return the money deposited in them. It is managed by a five-member board of directors, appointed by the president with the consent of the U.S. Senate. The FDIC provides coverage for deposits in national banks, in state banks that are members of the Federal Reserve System Federal Reserve System, central banking system of the United States. Established in 1913, it began to operate in Nov., 1914. Its setup, although somewhat altered since its establishment, particularly by the Banking Act of 1935, has remained substantially the same.
..... Click the link for more information. , and in other qualified state banks. (Mutual funds mutual fund, in finance, investment company or trust that has a very fluid capital stock. It is unique in that at any time it can sell or redeem any of its outstanding shares at net asset value (i.e.
..... Click the link for more information. and other securities securities, in finance, instruments giving to their legal holders rights to money or other property. Securities include stocks, bonds, notes, mortgages, bills of lading, and bills of exchange. See speculation and stock exchange .
..... Click the link for more information. are not covered.) It may also make loans to insured banks in the interest of protecting the depositors. The corporation derives its income from assessments on insured banks and interest on government securities. Since 1989 the FDIC has supervised the Savings Association Insurance Fund, the agency that was created to provide coverage for savings and loan associations savings and loan association, type of financial institution that was originally created to accept savings from private investors and to provide home mortgage services for the public.

The first U.S. savings and loan association was founded in 1831.
..... Click the link for more information. when the Federal Savings and Loan Insurance Corporation became insolvent. A sharp increase in bank failures in the late 1980s and early 1990s led to the insolvency (1991–92) of the FDIC as well, forcing it to seek government loans. The fund recovered by the mid-1990s.