Where does the FDIC’s reserve fund come?

The FDIC’s reserve fund is primarily funded by insurance premiums paid by member banks and financial institutions. These premiums are assessed based on the institution’s size and risk profile.

Key points about the fund:

1. Not taxpayer-funded: The FDIC does not rely on tax dollars for its reserve.
2. Interest and Recoveries: The fund also grows through interest earned on investments (usually in U.S. Treasury securities) and recoveries from failed banks.

This reserve is used to protect depositors by insuring deposits up to $250,000 per account, ensuring stability in the banking system.