The federal government insures most of your money in a bank account up to $250,000 per account owner, per bank

This protection is called FDIC insurance, and it covers deposits you hold in checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). If your bank fails, the Federal Deposit Insurance Corporation — a government agency — pays you back up to that limit. You do not pay for this insurance and do not need to sign up for it. It is automatic at any bank that displays the FDIC logo.

The $250,000 limit applies to each account owner at each bank separately. This means if you have $250,000 in a checking account and $250,000 in a savings account at the same bank, both are fully covered. But if you have $300,000 in one checking account at one bank, only $250,000 is insured — the extra $50,000 is not.

Credit unions work differently. They use NCUA insurance (National Credit Union Administration), which also covers up to $250,000 per account owner per credit union, using the same rules.

Key Takeaways

  • FDIC insurance covers up to $250,000 per account owner at each bank, and this protection is automatic — you do not need to do anything.
  • The $250,000 limit resets at each different bank, so you can have $250,000 insured at Bank A and another $250,000 insured at Bank B.
  • Joint accounts, retirement accounts, and trust accounts have separate insurance limits, so a married couple can insure up to $500,000 in a joint account.
  • Money in investment accounts, brokerage accounts, or money market mutual funds is not covered by FDIC insurance — only bank deposits are.
  • Credit unions use NCUA insurance instead of FDIC, but the coverage limit and rules are the same.

How the $250,000 limit works across multiple accounts

The key to understanding FDIC insurance is that the limit is per account owner, per bank. If you are the sole owner of an account, that account is covered up to $250,000. If you own a second account at the same bank — even if it is a different type, like a savings account instead of checking — both accounts are still covered up to $250,000 each.

The moment you move to a different bank, the limit resets. You can have $250,000 at Bank A and $250,000 at Bank B, and both amounts are fully insured. This is why people with large amounts of money sometimes split their deposits across multiple banks.

If you have more than $250,000 at one bank and want it all insured, you need to use different account ownership categories. A joint account with your spouse counts as a separate $250,000 limit. A retirement account (like an IRA) counts as a separate $250,000 limit. A trust account counts as a separate $250,000 limit. This means a married couple could have $250,000 in a joint checking account, $250,000 in the husband's individual IRA, and $250,000 in the wife's individual IRA — all at the same bank, all fully insured.

What FDIC insurance does and does not cover

FDIC insurance covers money you deposit into the bank in the form of checking accounts, savings accounts, money market deposit accounts, and CDs. It covers the full balance up to $250,000, even if the bank fails completely. You will be paid back in full, usually within a few business days.

FDIC insurance does not cover investment accounts. If your bank offers a brokerage service where you buy stocks, bonds, or mutual funds, that money is not FDIC-insured. It is held in a separate account and covered under different rules (usually SIPC insurance, which is different). Ask your bank which of your accounts are deposits and which are investments if you are unsure.

FDIC insurance also does not cover safe deposit boxes, cashier's checks, wire transfers, or money orders. These are services the bank provides, but the contents or value are not insured by the FDIC. If you keep valuables in a safe deposit box and the bank is robbed, the FDIC does not pay you back.

Joint accounts and retirement accounts have their own limits

A joint account — one owned by two or more people with equal rights — is insured separately from individual accounts. If you and your spouse have a joint checking account with $250,000, that entire amount is covered. If you also each have individual savings accounts with $250,000 each, those are covered separately. In total, the three accounts could hold $750,000 and all be fully insured at the same bank.

A retirement account held at a bank — such as a traditional IRA or Roth IRA — is also insured separately. The limit is still $250,000, but it does not count against your individual account limit. This means you could have $250,000 in a regular savings account and $250,000 in an IRA at the same bank, and both would be fully covered.

A trust account (also called a revocable living trust) is insured up to $250,000 per beneficiary, up to a total of $1.25 million for the account. This is more complex, and the rules depend on how the trust is written. If you have a large trust account, contact your bank to confirm how much is covered.

What happens if your bank fails

Bank failures are rare in the United States because banks are heavily regulated and inspected. But they do happen. When a bank fails, the FDIC steps in and either arranges for another bank to take over the failed bank's deposits, or it pays depositors directly.

If your bank fails and you have $200,000 in a checking account, you will receive $200,000. If you have $300,000, you will receive $250,000 and lose the extra $50,000. The FDIC typically pays within a few business days, though in rare cases it can take longer.

You do not need to do anything to receive your money. The FDIC automatically identifies your account and pays you. You do not file a claim or contact the FDIC unless there is a problem with your payout.

How to check if your bank is FDIC-insured

Look for the FDIC logo on your bank's website or in the lobby. Most traditional banks display it prominently. You can also search the FDIC's bank database at fdic.gov — type in your bank's name and it will tell you whether it is insured and what the coverage limits are for your specific accounts.

Online banks are FDIC-insured just like brick-and-mortar banks. The only difference is that you cannot walk into a branch. The insurance protection is identical.

If you use a financial institution that is not a bank — such as a brokerage firm, insurance company, or money transmitter — it is not FDIC-insured. These institutions have different rules and different protections. Ask before you deposit money.

Frequently Asked Questions

If I have $500,000 across two banks, is all of it insured?

Yes. If you have $250,000 at Bank A and $250,000 at Bank B, both amounts are fully insured. The FDIC limit resets at each different bank. If you had all $500,000 at one bank, only $250,000 would be covered.

Does FDIC insurance cover money I wire to someone else?

No. Once you send a wire transfer, the money leaves your account and is no longer a bank deposit. FDIC insurance covers deposits held in the bank, not money in transit or sent to others.

What if my bank is not FDIC-insured?

Your deposits are not protected by the federal government. If the bank fails, you could lose your money. Before opening an account, check the FDIC website to confirm the bank is insured. Most traditional banks are, but some smaller or specialty institutions are not.

Does FDIC insurance cover my savings if I have a loan with the same bank?

Yes. FDIC insurance covers your deposits regardless of whether you owe the bank money. Your savings account and your loan are separate. If the bank fails, your deposits are insured up to $250,000.

Are money market mutual funds covered by FDIC insurance?

No. Money market mutual funds are investments, not bank deposits, so they are not FDIC-insured. Money market deposit accounts (offered by banks) are FDIC-insured, but money market mutual funds (offered by brokerages) are not. The names are similar but the protection is different.