The FDIC guards against bank failure in the United States. Your deposit is only insured to a max of 250K, per depositor, per institution based on account type (regardless of your total balance, the excess is not insured). Therefore it is better for you to spread your funds around to multiple financial institutions, if you want it properly insured, against a run on the bank, or the bank becomes insolvent.
The insolvency is an issue, with all the financial woes we saw that caused the bank bailouts less than a decade ago. You stand to lose 2.75 million, if Chase becomes insolvent. Chase was one of several banks that helped caused the crisis at the end of the 1890's at the turn of the previous century, that ushered the Federal Reserve into existence a few decades later, to help deal with the great depression that followed.
The Federal Deposit Insurance Corporation (FDIC) is a United States government corporation operating as an independent agency created in 1933 by the Banking Act. Exchange-traded funds (ETFs) are a simple, cost-effective way to diversify your portfolio by combining characteristics of mutual funds and individual stocks. Like mutual funds, ETFs are made up of a basket of securities.
Like stocks, ETFs are traded on exchanges, with fluctuating value throughout the day. ETFs generally seek to track a benchmark index such as the S&P 500, with funds available for every major asset class. It is usually wise to have a large part of your funds diversified, into bonds, stocks, annuities and other means, and limit the amount of liquid, low interest funds, for day-to-day or near-term purchases.
Investment vehicles are typically not insured by the FDIC. In addition to mutual funds, this includes ETF's, investments in stock and bond markets, annuities, life insurance policies and Treasury securities.
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