Educational FDIC Consumer News

Understanding Fintech, Banking Relationships, and Deposit Insurance

June 7, 2024

As technology transforms the business of banking, it’s important to understand how these changes impact your financial security. Traditionally, consumers opened accounts directly with FDIC-insured banks, providing confidence that their money was safe. However, the rise of fintech companies has added new layers to consider.

FDIC Deposit Insurance Coverage

Opening a deposit account directly with an FDIC-insured bank ensures your money is protected up to at least $250,000. Most banks offer online and mobile banking, giving you flexibility while maintaining FDIC insurance coverage.

Nonbank Companies and FDIC Insurance

Opening an account with a nonbank company like Venmo is different. These companies are never FDIC-insured, even if they partner with FDIC-insured banks. Your funds only receive FDIC insurance once deposited into an insured bank, provided certain conditions are met. Be sure to read all terms and disclosures carefully to understand if your account is eligible for FDIC insurance.

Protecting Your Money from Scammers

Scammers often create fake websites and apps to steal personal information or funds. Always verify you’re dealing with an FDIC-insured bank using the FDIC’s BankFind tool. Be cautious of apps or websites asking for suspicious permissions.

For any questions or to verify the legitimacy of a bank, contact the FDIC at 877-ASK-FDIC or visit their website.

Understanding who you’re dealing with can help protect your money and personal information. For more details, read the full FDIC article on our blog. https://www.fdic.gov/resources/consumers/consumer-news/2024-06.html