How to Protect Checking Account Balances Above $250,000

The FDIC covers only $250,000 per account owner per bank

If you have more than $250,000 in a single checking account at one bank, the amount above $250,000 is not protected by the Federal Deposit Insurance Corporation (FDIC). The FDIC's standard coverage limit is $250,000 per depositor, per insured bank, per ownership category. That means if your account holds $350,000, only $250,000 is covered if the bank fails. The remaining $100,000 sits uninsured.

This limit has been in place since 2010, when it was raised from $100,000 during the financial crisis. It applies to checking accounts, savings accounts, and money market accounts held at the same institution under the same name. The coverage does not increase if you have multiple accounts at the same bank—the $250,000 limit covers all of them combined.

Key Takeaways

The FDIC insures only $250,000 per person per bank, so balances above that amount are unprotected if the bank fails.
You can insure more than $250,000 by spreading money across different banks, since each institution's coverage is separate.
Joint accounts, retirement accounts, and trust accounts each have their own $250,000 coverage limit, allowing you to protect larger total amounts at a single bank.
Brokered deposits and sweep accounts can hold more than $250,000 in FDIC coverage, but they work differently than standard checking accounts.
The FDIC does not cover investment products, bonds, or money held outside a bank account, even if the bank holds them for you.

Spreading money across multiple banks

The simplest way to insure balances above $250,000 is to open accounts at different banks. Because FDIC coverage is per-bank, not per-person, you can hold $250,000 at Bank A, $250,000 at Bank B, and $250,000 at Bank C, and all of it is covered. The banks do not have to be large national institutions—regional banks, credit unions (which are covered by the National Credit Union Administration, or NCUA, under the same $250,000 limit), and online banks all count.

The trade-off is managing multiple accounts. You will have separate login credentials, separate statements, and separate transfer processes. Some people use a spreadsheet to track which bank holds which portion of their money. If you need to move money between accounts for a purchase or transfer, you are moving it between institutions rather than within one, which typically takes one to three business days via ACH transfer.

This approach works best if you do not need to access all your money when ready. If you do, you may want to keep your primary checking account at your main bank and hold excess funds in a second or third account that you touch less often.

Using different account ownership categories at the same bank

You can hold more than $250,000 at a single bank if you own the accounts in different ways. The FDIC treats these as separate coverage categories: a checking account in your name alone, a joint checking account with your spouse, a retirement account (IRA or 401(k)), and a trust account each have their own $250,000 limit. This means you could theoretically hold $1 million at one bank across four different account types and have all of it covered.

A joint account with your spouse covers $250,000 for the account itself, not $250,000 per person. If you and your spouse each own $250,000 in separate individual accounts at the same bank, that is $500,000 covered. If you hold $250,000 in a joint account together, that is a separate $250,000 of coverage. The coverage applies to the account as a unit, not to each owner's share.

Retirement accounts (IRAs, Roth IRAs, SEP-IRAs) have their own $250,000 coverage limit separate from your regular checking account. If you have a traditional IRA with $250,000 and a checking account with $250,000 at the same bank, both are fully covered. Trust accounts set up as revocable living trusts also have separate coverage, though the rules are more complex if multiple beneficiaries are named.

How brokered deposits work for larger balances

A brokered deposit is a way to hold more than $250,000 in FDIC coverage through a single account. A brokerage firm (like Fidelity or Charles Schwab) takes your money and deposits it in small chunks across multiple banks on your behalf. Each chunk stays under the $250,000 limit at each bank, so the total is covered even if it exceeds $250,000.

From your perspective, you see one account statement and one login. You do not manage multiple bank accounts. The brokerage handles the distribution behind the scenes. The catch is that brokered deposits typically pay lower interest rates than direct bank accounts, because the brokerage is taking a cut. They also may have restrictions on how quickly you can withdraw money—some require a few days' notice before you can pull out a large sum.

Brokered deposits are common for people with $500,000 to $2 million in cash who want simplicity without spreading accounts across many banks. They are not the same as investing in stocks or bonds; the money stays in cash and earns interest, but the interest rate is usually lower than you would get at a high-yield savings account at a single bank.

Sweep accounts and money market funds

Some banks offer sweep accounts that automatically move money above a certain threshold into a money market fund or a linked savings account at a partner bank. The idea is to keep your checking account balance at a manageable level while protecting excess funds. When you deposit money, the bank sweeps the amount above your threshold into the secondary account, where it earns interest.

Sweep accounts can provide FDIC coverage for balances above $250,000 if they are set up correctly, but the structure matters. A sweep into a money market fund at the same bank does not add coverage—it is still one account owner at one bank. A sweep into a savings account at a different bank does add coverage, because now you have accounts at two institutions. Ask your bank specifically how their sweep account is structured and whether it increases your total FDIC coverage.

Money market funds held at a brokerage are not FDIC-insured at all. They are securities, not bank deposits. If your bank offers a sweep into a money market fund, that portion of your money is not protected by the FDIC, even though it is held by the bank.

What the FDIC does not cover

FDIC coverage applies only to deposits held in checking, savings, and money market accounts at banks. It does not cover stocks, bonds, mutual funds, or any investment product, even if your bank holds them for you. It does not cover safe deposit boxes, cashier's checks, or wire transfers in transit. If you buy a CD (certificate of deposit) at a bank, that is covered up to $250,000, but only if the bank fails before the CD matures—if you withdraw early and lose interest, the FDIC does not reimburse the lost interest.

The FDIC also does not cover money held outside a bank. If you keep cash at home, in a safe, or with a non-bank financial institution, there is no federal insurance. Some credit unions are insured by the NCUA instead of the FDIC, but the coverage limit is the same: $250,000 per account owner per institution.

Frequently Asked Questions

If I have $500,000 in one checking account at one bank, how much is insured?

Only $250,000 is insured by the FDIC. The remaining $250,000 is uninsured and at risk if the bank fails. To protect the full amount, you would need to move $250,000 to a different bank, set up a joint account or retirement account at the same bank, or use a brokered deposit service.

Does opening a savings account at the same bank give me more coverage?

No. The FDIC combines all deposit accounts you own at the same bank under the same name into one $250,000 limit. A checking account and a savings account at the same bank are counted together, not separately. You need accounts at different banks or different ownership categories (like a joint account or retirement account) to increase coverage.

Are online banks covered by the FDIC?

Yes, as long as they are FDIC-insured banks. Most online banks are insured. You can check a bank's FDIC status on the FDIC's BankFind tool on their website. Online banks often offer higher interest rates than traditional banks, so they can be a good place to hold the second or third $250,000 of your money.

What happens to my money if the bank fails?

The FDIC takes over the failed bank and pays out covered deposits up to $250,000 per account owner. This typically happens within a few business days. Amounts above $250,000 are paid only after all covered deposits are paid, and only if the bank's assets are sufficient—in most cases, uninsured deposits are lost.

Can I increase my coverage by adding my spouse's name to my account?

Yes, but only if you change it to a joint account. A joint account has its own $250,000 coverage limit separate from your individual account. If you have $250,000 in an account in your name alone and $250,000 in a joint account with your spouse, both are fully covered. However, the joint account coverage applies to the account as a whole, not to each person's share.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.