Insurance & Regulations

Deposit insurance has been the cornerstone of the U.S. banking system since the 1930s. Checking and savings accounts, CDs and other deposits at U.S. banks -- including online banks -- are insured for up to $100,000 per depositor per institution. However, we've seen that the same type of protection does not extend to assets in brokerage accounts.

There are three government entities that regulate the U.S. banking industry:

Office of the Comptroller of the Currency. The OCC is a division of the U.S. Treasury. It is responsible for regulating and supervising all nationally chartered banks. Either the Federal Reserve or Federal Deposit Insurance Corporation supervises banks with state-issued charters. The OCC provides guidelines to ensure that the banks it supervises and their software vendors use safe and secure banking practices.

Federal Reserve. In addition to conducting monetary policy as the nation's central bank, the Federal Reserve is also responsible for supervising and regulating state-chartered banks that are members of the Federal Reserve System.

The Fed is also responsible for ensuring compliance with consumer-protection banking laws. Federal Reserve regulations are aimed at specific banking and consumer-finance topics such as electronic funds transfer (Regulation E), disclosure of deposit yields and fees (Regulation DD) and the use of margin accounts (Regulations T and U).

Federal Deposit Insurance Corporation. The FDIC is responsible for supervising and regulating insured state-chartered banks that are not members of the Federal Reserve System. The FDIC is the federal institution that provides deposit insurance. Banks and thrift institutions pay premiums into a deposit-insurance fund in case the FDIC needs to bail out depositors of a failing bank.

Online banking offers a level of security, confidentiality and service that is comparable to what traditional brick-and-mortar institutions offer. Check with your institution on opening an online account or visit its Web site.