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What is the EDIE?

John Lister
John Lister

The Electronic Deposit Insurance Estimator, or EDIE, is an electronic tool offered by the Federal Deposit Insurance Corporation. The FDIC is a U.S. government corporation that insures deposits against the risk of a bank failing. EDIE is designed to help depositors estimate how much of their savings are protected by the FDIC.

The FDIC was created in 1933 in response to the banking failures that followed the 1929 stock crash, and the resulting financial depression. It is funded by payments made by member banks. In the event that this funding is not enough to cover payouts to depositors, the FDIC has further cash reserves and a legal right to borrow money from the Treasury.

There are strict rules about what is and is not insured. The first requirement is that the bank be an FDIC member. Member banks must display signs saying deposits are "backed by the full faith and credit of the United States Government."

Man climbing a rope
Man climbing a rope

Not all types of deposit are covered. The main principle is that only deposit accounts are covered: these include both demand and savings deposit accounts, certificates of deposits, and outstanding cashier's checks. Among the products not covered are stocks, bonds and mutual funds, as well as the contents of safe deposit boxes. One area of potential confusion involves the money markets: Money market deposit accounts are covered, but money funds are not.

There are also financial limits on the coverage. As of 2011, the first $250,000 of any deposit was covered. This limit covers all the depositor's accounts with a single bank, even if the accounts are at different branches or online. If a depositor has money in two or more different banks, up to $250,000 is protected in each bank.

These restrictions are somewhat complicated, so the FDIC offers a free electronic tool, EDIE, to help depositors check their level of coverage. The EDIE lets the user input details of all the money he or she has deposited in various accounts, and returns a summary of how much of the money is protected against bank failure. The tool can be particularly useful in complex situations such as those involving trust funds, or a depositor having both personal and business accounts with the same bank. EDIE is only designed as a guide, though, and is offered on a strictly advisory basis; it can't be cited as evidence in a legal dispute.

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