Are Business Accounts FDIC Insured?

Are business accounts FDIC insured?
Are business accounts FDIC insured?

Are business accounts FDIC insured has been one of the major questions business account owners have asked over the years.

I have had many of my readers asked me this question and I think the is the right time to answer the question so we all can get a clue of how business accounts by business owners are insured and protected.

Ensuring your business is a very important aspect of your development and growth as an entrepreneur, this is because as a business owner faces a lot of risks every day and one of the most important aspects of securing and protecting your business from such risks is by getting your business insured.

The sole purpose of getting your business insured is to protect your business from the risks surrounding the business is by having insurance to cover the business.

For this reason, there are many bodies who have taken the responsibility of providing insurance services for your business.

One such body is the FDIC and this is why a lot of readers want to know if their business accounts will be insured by the FDIC.

Before I answer your question, I will like to let you know that if you are a business person then you really need to get insurance for your business.

Before we go further to answer the question, are business accounts FDIC insured? We shall first of all have a look at the purpose or reason why you should have your business account insured and the numerous benefits you stand to gain from them.

If you are interested in getting insurance for your business then read below to understand the purpose of insurance for your business.

Purpose of Insurance for Your Business

Are business accounts FDIC insured?
Are business accounts FDIC insured?

As mentioned earlier the best purpose for getting your business insured is to make sure that the business is protected against any risk that may arise in the business environment.

Insurance will help protect your business as well as the financial assets of your business, intellectual and physical property from situations like a lawsuit.

Damage of properties, theft, vandalism, income loss and injuries on the employer and other causes of illnesses.

There are different types of business insurance that you can embark on and each of them will be according to your budget that is to say that you are not under any pressure to embark on an insurance policy that is above your budget.

The different types of business insurance you can do for your business are; commercial auto, commercial liability, commercial property, workers’ compensation etc.

From the above, we have understood that having an insurance policy to protect your business have proven to be the best thing you can do for your business to move it to a more reputable height.

Are Business Accounts FDIC Insured?

Are Business Accounts FDIC Insured?
Are Business Accounts FDIC Insured?

If you have been asking the question, are business accounts FDIC insured then you are at the right place to get the answer to the question above.

The FDIC is a very strong body in the US created in 1933 as a cushion to the effect of the stock market crash that happened in 1929 and of course the depression that followed it.

The stock market crash that happened in 1929 had so many negative effects on business owners which ultimately led most of them to depression.

One of the means by which the federal government cushioned the effect of the stock market crash was to establish the FDIC to make sure that every business account registered in the US is insured this will greatly reduce the effect of another stock market crash in the coming years as business owners will have somewhere to fall back to.

So the answer to your question is, Yes business accounts are FDIC insured to rescue or mitigate the business environment in the case of any financial crisis that may arise in the future.

There are aspects of the business account that the FDIC can insure and some other that the FDIC cannot provide insurance for.

The FDIC can insure deposits that are owned and made by corporations, partnerships, limited liability companies as well as profit and non-profit organisations.

There are eligible business accounts that the FDIC can insure and there are ones that cannot be insured by the FDIC.

The accounts that are eligible for insurance by the FDIC are;

  • Savings accounts
  • Checking accounts
  • Certificates of deposit
  • Cashiers check
  • Money orders

The FDIC also covers other official items issued by banks as well as money market deposits.

The FDIC insurance is put in place to assure that business owner and consumers in the US are confident about the banking and deposit system as this will ensure that they are at peace going about their normal businesses without fear.

You must have learned one or two things from the answer above; of course, it is very important that you got to know that the FDIC insures business accounts in the US and you can do your business without thinking so much of any impeding financial crisis because even if happens the FDIC will take care of it.

Facts About FDIC and How They Handle the Insurance of Business Accounts

Here are facts that you must know about the FDIC and how they handle the insurance of business accounts all over the country.

  • The most common business accounts by business owners like checkings, savings, money market etc can all be insured by the federal deposit insurance corporations so you do not have to be overly bothered about impending financial crisis if you are a business person.
  • The FDIC also insures bank deposits generated by most businesses
  • The FDIC does not cover some account types by business owners which include investments in stock, bonds, safe deposit boxes, life insurance, treasury bills or bonds etc.

The fact the FDIC covers a major aspect of the business accounts of business owners shows that it is giving consumers and business owners the opportunity to enjoy a good business atmosphere without the risk of any impending financial crisis.

If you have ever asked the question, are business accounts FDIC insured I hope you have gotten your answer to the question above? Now let’s move on to answering other questions you might have had over the years.

Is FDIC Insurance Per Account Or Per Person?

Many of our readers will want to know if the FDIC insurance is per person or per business account as this will enable them to maker the right choices of investment.

Well, the answer to that question is very simple, the FDIC insurance is both per account and per person. There is a standard deposit amount that can be deposited by each depositor per insured bank for each ownership category.

The standard deposit amount per depositor is tagged at $250000 per depositor.

The FDIC insures deposits made by a business person in one insured bank differently than in sure any deposits made and owned by the same person in another charter insured bank separately.

Is the FDIC Really Safe

A lot of people have different questions about the FDIC and one of the many questions is if the FDIC is really safe for insurance.

As a business person if you want to get your business insured you will always want to get to know the level of safety of the insurance body or company that will ensure your business is insured properly without any risk of failure in the future.

The FDIC is a very safe insurance body that receives insurance from member banks and insures deposits up to $25000.In case the FDIC runs short of cash in any case and is levying new fees to rebuild its depleted insurance funds the government will back up the FDIC.

Through this means you can be sure that the FDIC is very safe for the insurance of your business account without you having to worry about any financial crisis that may affect the FDIC.

What Are the Things Your Business Must Do To Get Covered By FDIC

Are Business Accounts FDIC Insured?
Are Business Accounts FDIC Insured?

Before the FDIC provides insurance for your business you must be ready to meet some conditions that will give your business out as a legit entity that is worthy of receiving such coverage.

You can not just wake up with any type of organization and decide that the FDIC must cover your business.

The FDIC is a professional organization and takes its time to monitor your business before providing coverage for your business.

The requirements for getting covered by the FDIC are two and before your business will be covered by the FDIC.

The two things to take into considerations are;

  • The business be it a corporation, partnership, limited liability companies must be very well organized under the state laws. You cannot wake up one morning without proper organization and due recognition for the law and decide that your business must be covered. Deposits made by revocable trusts, a sole proprietorship cannot be considered to be business accounts.
  • The main purpose of the business account making the deposit must other than to increase deposit insurance coverage.

The above are the two things that the FDIC mostly take into considerations before deciding to cover an account so if you are looking to get your business account insured by the Federal deposit insurance corporation then you must carefully work on the two aspects mentioned above.

Take note that deposits made into personal account from the owners of a corporation, partnership or limited liability companies are not used to calculate the total deposits made in a business account.

Remember also that the FDIC does not cover accounts owned by individuals.

The accounts that the FDIC does not cover are investments made in stock, bonds, life insurance, treasury bills and losses from theft.

Apart from the accounts listed above that, they do not cover the FDIC covers other aspects of business accounts and help the businesses to stay in the business risk-free and save.

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I am sure you’ve got the answer to your question, are business accounts FDIC insured?.

Do you have more questions on the insurance of business accounts by the FDIC? Then drop your questions in the comment section and get the answers immediately.

About the Author: Kenechukwu

Life is a journey and I have been committed to going on this life journey with you. My experiences so far have shaped my understanding of the best way to approach life. At Keneable we discuss lifestyle as well as self development and learn everyday

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