For individual bank accounts, if your bank goes out of business, the government guarantees you will get back up to $250,000 of the money in your individual bank account through FDIC insurance. There is similar insurance coverage for credit union accounts (called NCUA or NCUSIF insurance).
Funds loaded onto prepaid cards are typically held in pooled (not individual) accounts at banks or credit unions. Pooled accounts may qualify for FDIC or NCUA pass-through insurance if they meet certain requirements. Among other things, in order for your funds to be insured, the bank must have information that identifies you on file.
Your cardholder agreement may indicate whether your card is eligible for pass-through insurance.
Visit http://fdic.gov/deposit/deposits/prepaid.html for more details.
