FDIC Insured Banks – Are Online Savings Accounts FDIC Insured?
September 20, 2008
FDIC insurance on bank accounts is one of the things helping consumers sleep a little easier during these crazy financial market conditions. Online savings accounts that are insured by FDIC should have no different protection than funds kept in a local bank that’s FDIC insured.
A good friend of mine and asked me last night if the money in my ING Direct account is FDIC insured. He knows we have our emergency fund with ING Direct and he has some cash there as well. I think his concern was rooted in the fact that ING Direct is a “virtual bank” of sorts, without a physical location to visit.
There are a number of these “direct” banks that offer online access for high yield savings accounts. Although they may not have a local branch you can visit to make withdrawals, if they are FDIC insured they should have the same protection as an FDIC insured local, regional, or national bank.
One easy way to know if an account is FDIC insured is to look at the terms and conditions when opening the online savings account. I visited the sites of various direct online banks, below are statements from each of the sites that reference FDIC insurance and FDIC limits:
“Online Savings Accounts offered by First National Bank of Omaha, Member FDIC. Deposits are insured to the maximum permitted by law” – FNBO Direct
“Are deposits at ING DIRECT insured by the FDIC – Federal Deposit Insurance Corporation? Yes, deposits at ING DIRECT are insured through FDIC membership. We are registered with the FDIC under the name of ING Bank, fsb, located in Wilmington, DE. ING DIRECT’s FDIC certificate number is 35489” – ING Direct
“HSBC Advance deposit accounts are offered by HSBC Bank USA, N.A. Member FDIC. Deposits are insured to the maximum permitted by law.” – HSBC Advance
“FDIC-insured up to $100,000 per depositor with Wilmington Trust FSB. Click to view the WTDirect Savings Account Agreement and Disclosures” – WT Direct
You may have noticed that the ING reference mentions an FDIC certificate number. You can visit the FDIC website and view the certificate for all FDIC banks, for example here is the FDIC certificate for the First National Bank of Omaha, FNBO Direct.
All posts by Ben Edwards