Do you have more than a quarter-million dollars in your bank account?

If not, you’re among the majority of Americans whose deposits are fully insured by the federal government. Should your bank go under and fail to have enough liquidity to give you back what you deposited, a federal agency called the Federal Deposit Insurance Corp. will make you whole.

The FDIC insures deposits up to $250,000 per individual per bank — with more coverage available with specific account arrangements. However, many legislators on both sides of the aisle say that’s not enough. Some have proposed modest increases, while at least one has advocated for no limit at all.

Congress has yet to agree on an amount, but it is a regular topic of discussion on Capitol Hill. In November, the House Financial Services Committee held a hearing in which several legislators and bank lobbyists voiced their support for higher deposit coverage.

Advocates claim that more deposit insurance will make the banking industry more stable, but in fact, the opposite is true. It would increase systemic risk and, at the same time, induce banks to hike account fees to pay the cost of more coverage. Boosting the insured maximum would serve only the very wealthy at the expense of the typical American.

A very tiny minority of account holders have enough deposits to exceed the FDIC’s current maximum. As Rep. Roger Williams, R-Texas, acknowledged during November’s hearing, more than 99% of deposits are already insured.

Nonetheless, many in Congress think leaving even 1% of deposits uninsured poses a significant risk to the economy. They worry that, unless more insurance is offered, bank runs will become more likely. Frequent bank runs would wreak havoc on the financial industry and could threaten the economy.

While deposit insurance can prevent bank runs, it doesn’t make the industry more stable. In fact, it often increases systemic risk by disincentivizing consumers from evaluating their banks’ risk profiles. Assured that the FDIC will bail them out if their bank goes under, many consumers will go to banks offering the highest yields and other perks, typically provided by less risk-averse financial institutions.

The flow of deposits to less stable banks threatens the soundness of the entire financial system. According to a group of economists at the World Bank and International Monetary Fund, “Deposit insurance may lead to more bank failures and, if banks take on risks that are correlated, systemic banking crises may become more frequent.”

Insurance doesn’t come free. Like any insurer, the FDIC charges premiums, which they call “assessments.” Banks pay the assessments annually, contributing to their operating costs. Banks often respond to rising operating costs by raising the monthly fees they charge customers. In this way, typical consumers are forced to fund insurance for wealthy depositors.

Congress should avoid policies that serve only wealthy depositors, to the detriment of the banking industry’s soundness and, not to mention, the shrinking of account-holders’ wallets.

Tyler Curtis is a contributor at Young Voices/InsideSources.com.