What to know about fintech, banking relationships, and deposit insurance

Technology has continued to transform the business of banking in recent years. Traditionally, consumers opened deposit accounts directly with banks (whether in-person, on the bank’s website, or through the bank’s mobile app). The easiest way for most consumers to have confidence that their money is safe continues to be opening an account directly with insured depository institutions, like FDIC-insured banks and savings associations.

Increasingly, some consumers are choosing to open accounts through nonbank companies (typically online or through mobile apps), such as technology companies providing financial services (often referred to as fintech companies), that may or may not have business relationships with banks. If and how a bank is involved is key to understanding whether or not your money is protected by deposit insurance. However, in some cases, it is not always clear to consumers if they are dealing directly with an FDIC-insured bank or with a nonbank company.

Read the full article for information on FDIC deposit insurance coverage, nonbank companies, how to avoid fake banks & apps, and more sources!