Does FDIC cover theft?

 No, FDIC insurance does not cover theft of funds from your account. FDIC insurance is designed to protect depositors in the event of a bank failure, ensuring that you receive your insured deposits (up to $250,000 per depositor, per bank, per ownership category).

However, if money is stolen from your account through fraud, theft, or cybercrime, here are other protections that may apply:

1. Bank’s Fraud Protections: Many banks offer their own protection against unauthorized transactions. They may reimburse customers for fraudulent activity or unauthorized withdrawals if reported promptly.

2. Federal Law Protections:

   • Electronic Funds Transfer Act (EFTA): For electronic transfers, such as debit card fraud or online theft, the EFTA limits your liability if you report the theft within a certain time frame:
     • Within 2 business days: You may only be liable for up to $50.
     • Between 2 and 60 days: You may be liable for up to $500.
     • After 60 days: You could be liable for all unauthorized transactions.
   • Fair Credit Billing Act (FCBA): For credit card theft, the FCBA limits your liability to $50 for unauthorized charges.

3. Identity Theft Protections: Many banks and credit monitoring services offer tools to help protect against identity theft, such as fraud alerts, monitoring, and recovery services.

To protect yourself from theft, it’s important to report any unauthorized transactions to your bank immediately. The FDIC protects against bank insolvency, but theft and fraud are covered by other laws and the bank’s own policies.