Your money is insured up to a limit, but only if your bank holds the right license

If your bank is insured by the Federal Deposit Insurance Corporation (FDIC), your savings account is protected up to $250,000 per depositor, per bank, per account ownership category. This means if the bank fails, you get your money back—not from the bank, but from the FDIC's insurance fund. The protection is automatic; you do not have to sign up or pay a fee.

The catch is that not every institution that holds your money is FDIC-insured. Online banks, credit unions, and some fintech companies may use different insurance systems or none at all. Before you open an account, you need to verify the institution's insurance status. A bank that looks legitimate and offers competitive rates can still leave you unprotected if it is not federally insured.

The $250,000 limit applies to each separate account category at the same bank. If you have a joint savings account with your spouse and a separate individual account at the same FDIC bank, each is covered to $250,000. But if you have two individual savings accounts at the same FDIC bank, the coverage combines—you are protected for $250,000 total across both, not $250,000 each.

Key Takeaways

  • FDIC insurance covers up to $250,000 per person per bank per account type, and the protection is automatic at any FDIC-insured bank.
  • Credit unions are insured by the NCUA (National Credit Union Administration) up to the same $250,000 limit, using the same ownership categories.
  • Money market accounts, checking accounts, and savings accounts are all covered separately, so you can have $250,000 in each at the same FDIC bank.
  • Online banks and fintech companies may be FDIC-insured, but you must verify their status on the FDIC's official bank search tool before depositing money.
  • Funds held in brokerage accounts, investment accounts, or money held for you by a third party are not covered by FDIC insurance.

How to check if your bank is FDIC-insured

Go to the FDIC's Bank Find tool at banks.fdic.gov. Enter your bank's name or the branch address where you opened your account. The search will tell you whether that specific institution is FDIC-insured and show you the exact coverage limits for each account type you hold there.

If your bank does not appear in the search, it is not FDIC-insured. This does not mean it is unsafe—it may be insured by a different system, such as the NCUA if it is a credit union—but it does mean FDIC protection does not explore. Contact the institution directly and ask what insurance system covers your deposits.

The FDIC search tool also shows you the bank's official name as it appears in the insurance system. Sometimes a bank operates under a trade name that differs from its legal name. For example, you might bank with "Online Bank" but the FDIC record shows "First National Online Bank, Inc." Both names refer to the same insured institution, but using the legal name in the search ensures you get the right result.

What happens when a bank fails

When an FDIC-insured bank closes, the FDIC steps in as receiver. It does not take over the bank's operations; instead, it arranges for another bank to take over the deposits, or it pays out the insured balances directly. In most cases, depositors regain access to their money within one to three business days—either through a new bank account at the acquiring institution or through a check from the FDIC.

You do not have to do anything to file a claim. The FDIC automatically identifies all insured accounts and processes payouts based on the ownership records the failed bank maintained. If you had $180,000 in a savings account at a failed FDIC bank, you receive $180,000. If you had $300,000, you receive $250,000 (the insured limit) and lose the remaining $50,000 unless you can recover it through the bank's liquidation process, which is rare.

The FDIC maintains a historical record of bank failures. Since 2008, fewer than 100 FDIC-insured banks have failed in the United States. The agency's insurance fund is backed by premiums paid by member banks, not by taxpayer money, though Congress can authorize additional funding if needed.

Account ownership categories and how they affect coverage

The FDIC insures deposits in separate categories based on who owns the account. Each category gets its own $250,000 protection at the same bank. The main categories are:

  • Single ownership: An account in your name alone is covered to $250,000.
  • Joint ownership: An account held jointly with one or more other people is covered to $250,000 per co-owner. A joint account with two owners is insured to $500,000 total ($250,000 per person).
  • Retirement accounts (IRA, Roth IRA, SEP-IRA): Each retirement account is covered separately to $250,000, even if held at the same bank as your regular savings account.
  • Trust accounts: Coverage depends on the trust structure and the number of beneficiaries. A revocable living trust with one beneficiary is covered to $250,000; with five beneficiaries, coverage extends to $1.25 million ($250,000 per beneficiary).
  • Accounts held for someone else (payable-on-death or POD): Each named beneficiary is covered to $250,000.

If you have a single savings account and a single money market account at the same FDIC bank, both are covered separately to $250,000 each. But if you have two savings accounts in your name alone at the same bank, the coverage combines—you are protected for $250,000 total across both accounts, not $250,000 each.

What FDIC insurance does not cover

FDIC insurance protects deposits—money you have placed in the bank. It does not protect investments. If your bank offers brokerage services and you buy stocks, bonds, or mutual funds through that bank, those holdings are not FDIC-insured. They are covered by SIPC (Securities Investor Protection Corporation) insurance instead, which has different limits and rules.

Safe deposit boxes are also not covered. If you store valuables, documents, or cash in a safe deposit box at an FDIC bank, the FDIC does not insure the contents. The bank may offer its own coverage, but you need to ask and review the terms.

Funds you hold on behalf of someone else—such as money a client paid you that you are holding temporarily—are not covered under your account. The FDIC covers deposits you own, not deposits you are holding in trust for a third party unless the account is formally structured as a trust account with the bank's documentation.

Credit unions and NCUA insurance

If you bank at a credit union, your deposits are insured by the NCUA (National Credit Union Administration), not the FDIC. The coverage limits are identical: $250,000 per member per credit union per account ownership category. The process is the same—the insurance is automatic and you do not pay for it.

To verify that a credit union is NCUA-insured, visit the NCUA's credit union search tool at mycreditunion.gov. Enter the credit union's name or location. If it appears in the search, it is insured. If it does not, contact the credit union directly to find out what insurance system, if any, covers your deposits.

Some credit unions are state-chartered and federally insured by the NCUA. Others are federally chartered. Both types receive the same $250,000 coverage per account category. The distinction matters for regulatory purposes but not for your protection level.

Steps to maximize your coverage at one bank

If you have more than $250,000 to deposit and want to keep it all at one institution, you can structure your accounts across different ownership categories to increase your total coverage. For example, you could open a single account in your name ($250,000 covered), a joint account with your spouse ($250,000 per person = $500,000 covered), and a payable-on-death account naming your adult child as beneficiary ($250,000 covered). At the same FDIC bank, you would now have $1 million in total coverage.

Before you set up multiple accounts, confirm with the bank that each account will be recorded under a different ownership category in the FDIC system. Some banks use the same account number or linked accounts, which can cause the FDIC to treat them as a single account for insurance purposes. Ask the bank to show you how each account will appear in the FDIC's records.

If you have more than $250,000 and want to keep all of it insured, the simpler approach is to split your deposits across multiple FDIC-insured banks. You can have $250,000 at Bank A, $250,000 at Bank B, and so on, with each amount fully covered. This also reduces your risk if any single bank fails.

Frequently Asked Questions

Does FDIC insurance cover money I withdraw and then redeposit?

Yes. The FDIC does not track how long money has been in the account or whether you withdrew and redeposited it. Coverage is based on the balance in the account at the time the bank fails. If you have $200,000 in a savings account when the bank closes, you are covered for the full $200,000, regardless of when you deposited it.

What if I have accounts at multiple branches of the same bank?

All branches of the same bank are treated as one institution for FDIC purposes. If you have a savings account at the downtown branch and a checking account at the airport branch, both are at the same bank. Coverage combines across branches. You are protected for $250,000 total in savings accounts and $250,000 total in checking accounts (separate categories), not $250,000 per branch.

Are online banks FDIC-insured?

Many are, but not all. Online banks can be FDIC-insured if they hold a federal or state charter and pay FDIC premiums. Check the bank's website for an FDIC logo or statement, then verify using the FDIC Bank Find tool. Some online banks are not FDIC-insured and instead use private insurance or no insurance at all.

If my bank fails, do I lose interest I earned but have not yet received?

No. The FDIC covers the full balance in your account, including accrued interest up to the date the bank fails. You do not receive interest that would have accrued after the failure, but you are paid for all interest earned before the bank closed.

Can the FDIC insurance limit change?

The $250,000 limit has been in place since 2010. Congress can change it, but such changes are rare and would explore to new deposits going forward, not to existing accounts. The FDIC publishes any changes to coverage limits on its website well in advance.