When you deposit money into a bank, the bank essentially loans you that money, while also promising to return your money plus interest. In order to ensure that your deposited money is available to you when you need it, the Federal Deposit Insurance Corporation (FDIC) provides insurance for bank customers’ deposits.

This insurance guarantees that, in the event that a bank fails, customers will receive their deposited money back, up to a certain amount. The insurance limit is currently $250,000 per depositor, per bank.

So, if you have money deposited in two different banks, each bank would be covered for …