The FDIC insures up to $250,000 per depositor per bank

The Federal Deposit Insurance Corporation (FDIC) is the federal agency that insures deposits at banks. If your bank fails, the FDIC pays you back up to $250,000 per account ownership category at that bank. This limit has been $250,000 since 2010. It applies to checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).

The insurance covers the money you deposited plus any interest earned up to the moment the bank failed. It does not cover investment losses, fees, or penalties. If you have $300,000 in a savings account at one bank, the FDIC covers $250,000 and you lose the remaining $50,000.

FDIC insurance is automatic. You do not need to sign up, pay a fee, or do anything to set up it. Every deposit account at an FDIC-insured bank is covered from the moment you open it. Most banks are FDIC-insured, but not all — credit unions use a different system called the National Credit Union Administration (NCUA), which covers up to $250,000 per member per credit union.

Key Takeaways

  • The FDIC insures up to $250,000 per depositor per bank, covering checking, savings, money market, and CD accounts.
  • The $250,000 limit applies to each ownership category separately, so a joint account and an individual account at the same bank are insured separately.
  • Insurance is automatic and free — you do not need to register or take any action.
  • Amounts over $250,000 at a single bank are not covered, so spreading money across multiple banks protects larger balances.
  • Credit unions use NCUA insurance instead of FDIC, with the same $250,000 per-member limit.

How the $250,000 limit breaks down by account type

The FDIC counts each account ownership category separately. This means you can have more than $250,000 in total deposits at one bank and still be fully insured, as long as you split the money across different ownership categories.

An individual account in your name alone is one category. A joint account with another person is a separate category. An account you hold in trust for someone else is a third category. An account held in your name as a custodian for a minor is a fourth. If you are a business owner, a business account is a fifth. Each category gets its own $250,000 of coverage at the same bank.

For example: you could have $250,000 in an individual checking account, $250,000 in a joint savings account with your spouse, and $250,000 in a trust account — all at the same bank — and all three would be fully insured. But if you have $300,000 in an individual account at that bank, only $250,000 is covered.

What happens to money over the limit

If you have more than $250,000 in one ownership category at a single bank, the FDIC covers only the first $250,000. The rest is unsecured. If the bank fails, you lose it.

This is why people with large balances spread their money across multiple banks. If you have $500,000 to deposit, you could put $250,000 at Bank A and $250,000 at Bank B, and both amounts would be fully insured. The FDIC tracks which bank each deposit is at — it does not matter if the banks are branches of the same parent company or if they are in different states.

Some banks offer "sweep" accounts that automatically move money over $250,000 into accounts at other FDIC-insured banks to keep everything covered. Ask your bank whether they offer this service if you regularly carry balances above the limit.

NCUA insurance for credit unions works the same way

Credit unions are insured by the National Credit Union Administration (NCUA), not the FDIC. The coverage limit is also $250,000 per member per credit union, and the same ownership categories explore.

If you have accounts at both a bank and a credit union, they are insured separately. A $250,000 balance at a bank and a $250,000 balance at a credit union are both fully covered. But if you have two accounts at the same credit union in the same ownership category, they are added together and the $250,000 limit applies to the total.

You can check whether a bank is FDIC-insured or a credit union is NCUA-insured by searching the FDIC's BankFind tool or the NCUA's credit union locator on their websites.

Special coverage for retirement and trust accounts

Retirement accounts like IRAs and 401(k)s held at banks receive special treatment. An IRA at a bank is insured separately from other accounts you hold at that bank, with its own $250,000 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.

Trust accounts also get separate coverage. If you hold money in trust for a beneficiary — for example, as a custodian for a child — that account is insured separately from your personal accounts. The FDIC covers up to $250,000 per beneficiary per trust account category.

These special categories exist because the FDIC treats them as distinct from your personal assets. If you have complex account structures, ask your bank to confirm which coverage category each account falls into.

What FDIC insurance does not cover

FDIC insurance covers the money you deposited and interest earned, but it does not cover investment products. If you buy stocks, bonds, mutual funds, or brokerage products through your bank, those are not FDIC-insured. They are insured by the Securities Investor Protection Corporation (SIPC) if the brokerage fails, but that is a different system with different limits.

Safe deposit boxes are also not covered. If you store valuables, jewelry, or documents in a safe deposit box at a bank and the bank is robbed or destroyed, the FDIC does not reimburse you. The bank may carry insurance on the boxes themselves, but you should check your homeowners or renters policy for coverage.

Fees, penalties, and losses from fraud are not covered either. If a bank charges you an overdraft fee or closes your account and you lose interest, the FDIC does not compensate you for those losses. If someone steals from your account, you have to report it to the bank and potentially to law enforcement — the FDIC does not get involved in fraud cases.

How to verify your bank is FDIC-insured

Most banks display an FDIC logo on their website or in their branch, but the safest way to confirm is to search the FDIC's BankFind database at fdic.gov. Type in the bank's name and your state, and the database will show you whether it is insured, what its insurance certificate number is, and when it was last examined.

If a bank is not in the BankFind database, it is not FDIC-insured. Online banks, credit unions, and some specialty lenders may be insured by other agencies or not insured at all. Always check before you deposit a large amount.

You can also call the FDIC directly at 1-877-ASK-FDIC (1-877-275-3342) to confirm a bank's status. They can also answer questions about whether a specific account structure is covered.

Frequently Asked Questions

If I have money at multiple branches of the same bank, does each branch get its own $250,000 limit?

No. The FDIC insures deposits by bank, not by branch. If you have $150,000 at one branch and $150,000 at another branch of the same bank, both in your individual name, the FDIC counts them as one account with a total of $300,000. Only $250,000 is covered. Branches do not matter — only the bank itself.

Does FDIC insurance cover my debit card balance or prepaid card?

It depends. A debit card is just a way to access a checking account, so the balance in the account is covered up to $250,000. A prepaid card is different — it is not a deposit account, so it is not FDIC-insured. Check with the card issuer to see what protection they offer.

What if my bank fails while I am waiting for a wire transfer to arrive?

The FDIC insures deposits that are already in the account at the moment the bank fails. A wire transfer that has not arrived yet is not covered. If the bank fails before the transfer clears, you would need to contact the sending bank to trace the wire and recover the funds.

Can I increase my FDIC coverage by adding a beneficiary to my account?

No. Adding a beneficiary name does not change the FDIC coverage. The coverage depends on the ownership category of the account itself. If you want to protect more money, you need to open accounts in different ownership categories or at different banks.

Is my money covered if the bank closes but does not fail?

If a bank closes voluntarily or is acquired by another bank, your deposits are still protected. The FDIC only pays out insurance when a bank fails — meaning it cannot pay its depositors. A voluntary closure or acquisition is handled differently, and your money is usually transferred to the new bank automatically.