FDIC insurance genuinely protects bank deposits (up to $250,000 per depositor, per bank, per ownership category) against the bank itself failing – that protection is real and has held up reliably in past bank failures.

What it doesn’t protect against is inflation. A dollar sitting in an FDIC-insured savings account is safe from bank failure but not safe from losing purchasing power if the account’s interest rate is lower than the inflation rate – which has been true for ordinary savings accounts during many recent periods.

That’s the real distinction behind claims that savings ‘aren’t safe’: it’s not about FDIC coverage failing, it’s about the difference between principal protection (which FDIC insurance provides) and purchasing-power protection (which it doesn’t) – a reason some savers diversify a portion of long-term savings into inflation-resistant assets rather than keeping everything in a low-yield deposit account.