You can purchase a Certificates of Deposit (CD) from several kinds of institutions, but be wary of those that are not FDIC insured. Not all bank-sounding names are actually banks, nor are they insured by the FDIC.

If you purchase a CD from a third-party broker instead of directly from the bank, you will have to rely on the broker to make your deposit and acquire the CD. “Remember that the FDIC does not license or register deposit brokers and that an unethical broker could mislead or defraud its customers,” explained Martin Becker, an FDIC Senior Deposit Insurance Specialist. “If the broker fails to place your funds into a CD at an FDIC-insured bank, your money will not be insured by the FDIC. Also, be sure to review the account agreement and other supporting documentation to confirm you are in fact purchasing a CD and not a financial product that is not insured by the FDIC.” 

The Federal Deposit Insurance Corporation (FDIC) was created as a result of bank closures during the Great Depression in the 1930s. The FDIC is a government agency which insures that money deposited in the bank will not be lost if the bank fails. The FDIC is not funded by congress, but instead member banks pay premiums. At the end of 2014, the FDIC had about $6.28 billion in its insurance fund. FDIC Insurance at a member bank covers checking accounts, negotiable order of withdrawal (NOW) accounts, savings accounts, money market deposit accounts (MMDAs), certificates of deposit (CD), and official items issued by a bank (such as cashier’s checks or money orders). Typically, the FDIC insures deposits up to $250,000 per customer. Investing in a non-member bank could lead to a loss of assets if the bank fails. Bank failures are not as prevalent as they were in the 1930s, but over 500 banks have still closed since 2008.

To determine if a bank is FDIC-insured, you can ask a bank representative, look for the FDIC sign at your bank, call the FDIC at 877-275-3342, or you can use the FDIC's BankFind tool. BankFind allows you to access detailed information about all FDIC-insured institutions, including branch locations, the bank's official website address, the current operating status of your bank, and the regulator to contact for additional information and assistance.

Owen County State Bank is a member of the FDIC so you can feel confident that your money with us is safely insured up to $250,000 per depositor, per ownership category. For basic category-by-category overview of FDIC deposit insurance coverage, you can use the Account Categories Tool.