Yes, traditional savings accounts held at FDIC-insured banks are covered up to $250,000 per depositor, per bank

A traditional savings account at a bank that holds an FDIC charter is insured. The FDIC (Federal Deposit Insurance Corporation) covers the money you deposit in a savings account the same way it covers checking accounts, money market accounts, and certificates of deposit — up to $250,000 per person, per institution. This limit applies to each separate bank you use, so if you have $250,000 in savings at Bank A and $250,000 at Bank B, both amounts are covered.

The coverage is automatic. You do not need to register, explore, or do anything to set up it. If the bank fails, the FDIC steps in and returns your money up to the limit. This has happened 563 times since the FDIC was created in 1933, most recently in 2023 when Silicon Valley Bank failed and the FDIC returned deposits to account holders.

The key word is "traditional." Some savings products that look like savings accounts are not covered the same way, and some banks do not have FDIC insurance at all. Knowing the difference matters because it determines whether your money is protected if the institution fails.

Key Takeaways

  • FDIC insurance covers traditional savings accounts at member banks up to $250,000 per depositor per bank, and coverage is automatic with no action required.
  • The $250,000 limit resets at each separate bank, so you can have multiple covered accounts by spreading deposits across institutions.
  • Online banks, credit unions, and brokerage firms may offer savings accounts that are not FDIC-insured or are insured differently.
  • Joint accounts, retirement accounts, and accounts held in trust have separate coverage limits, so the same bank can cover more than $250,000 if the money is held in different ownership categories.
  • You can check whether a specific bank is FDIC-insured by searching the FDIC's Bank Find tool on their website.

What counts as a traditional savings account for FDIC purposes

The FDIC defines a savings account as a deposit account where the bank can require written notice before you withdraw funds, though in practice most banks do not enforce this. The account must be held at a bank that is an FDIC member — which includes most traditional banks and many online banks, but not all.

A traditional savings account differs from other deposit products in one important way: it is not a time deposit. A certificate of deposit (CD) is a time deposit because you agree to leave the money untouched for a set period. A savings account has no maturity date. You can withdraw whenever you want, though some banks may charge a fee if you exceed a certain number of withdrawals per month.

Money market accounts offered by banks are also covered by FDIC insurance in the same way as savings accounts. The coverage limit is still $250,000 per depositor per bank, even if you hold both a savings account and a money market account at the same institution — the two are combined under one limit.

Banks that are not FDIC-insured

Not every institution that calls itself a bank is FDIC-insured. Credit unions are insured by a different federal agency, the National Credit Union Administration (NCUA), which offers the same $250,000 coverage but operates separately. If you have a savings account at a credit union, it is covered by NCUA insurance, not FDIC insurance.

Online banks are FDIC-insured if they are chartered as banks and hold FDIC membership. Most major online banks (Ally, Marcus, Discover) are FDIC members. But some online savings products are offered by non-bank financial companies that are not insured at all. Brokerage firms and investment companies do not offer FDIC-insured savings accounts; they may offer sweep accounts or money market funds, which are covered by different insurance schemes or not covered at all.

If you are unsure whether a specific bank is FDIC-insured, search for it in the FDIC's Bank Find tool on fdic.gov. You can search by bank name or by the city and state where you opened the account. The tool will tell you whether the bank is an FDIC member and what its insurance coverage structure is.

How the $250,000 limit works across multiple accounts

The $250,000 limit is per depositor, per bank. This means if you have $100,000 in a savings account and $200,000 in a checking account at the same bank, both are covered because together they total $300,000 but the limit is $250,000 — wait, that is wrong. Let me correct that: if you have $100,000 in savings and $200,000 in checking at the same bank, only $250,000 total is covered. The two accounts are combined under one limit.

If you want to cover more than $250,000 at the same bank, you can use different ownership categories. A savings account held in your name alone is covered up to $250,000. A joint savings account held in your name and another person's name is covered up to $250,000 as a separate account. A savings account held in trust for a beneficiary is covered separately. So you could have $250,000 in an individual account, $250,000 in a joint account with your spouse, and $250,000 in a trust account at the same bank, and all three would be fully covered.

Retirement accounts (IRAs, SEP-IRAs, straightforward IRAs) have their own $250,000 coverage limit separate from your other accounts at the same bank. This means a $250,000 traditional IRA and a $250,000 savings account at the same bank are both fully covered.

What happens if a bank fails

When an FDIC-insured bank fails, the FDIC takes control of the bank's assets and deposits. In most cases, the FDIC arranges for another bank to take over the failed bank's accounts. Depositors wake up to find their accounts have moved to a new bank, usually within one or two business days, and their money is still there up to the $250,000 limit.

If no bank agrees to take over the accounts, the FDIC pays depositors directly. This process takes longer — typically a few weeks — but the outcome is the same. You receive your money up to $250,000 per account category.

Money above the $250,000 limit is not automatically lost. The FDIC sells the failed bank's assets and uses the proceeds to pay uninsured depositors, though they may receive less than the full amount or may wait years for payment. But for amounts within the limit, you are made whole.

Online banks and FDIC coverage

Online banks that are FDIC members offer the same coverage as traditional brick-and-mortar banks. Ally Bank, Marcus by Goldman Sachs, and Discover Bank are all FDIC-insured. Their savings accounts are covered up to $250,000 per depositor per bank, with no difference in coverage because the bank operates online.

Some online savings products are not offered by banks at all. Fintech companies and investment platforms sometimes offer "savings" or "cash management" accounts that are not FDIC-insured. These accounts may hold your money in sweep arrangements with multiple banks (which can increase coverage through a special FDIC program) or may not be insured at all. Always check whether the company offering the account is an FDIC member bank before you deposit large amounts.

Frequently Asked Questions

If I have $300,000 in a savings account at one bank, how much is covered?

$250,000 is covered by FDIC insurance. The remaining $100,000 is not insured. If you want to cover the full $300,000, you would need to move $50,000 to a savings account at a different FDIC-insured bank, or open a joint account or retirement account at the same bank if you are may be able to access.

Does FDIC insurance cover savings accounts at credit unions?

No. Credit unions are insured by the NCUA, not the FDIC. The coverage limit and protections are similar ($250,000 per depositor per institution), but it is a separate insurance system. Check your credit union's membership status on the NCUA website.

If I move my money from one bank to another, do I lose FDIC coverage during the transfer?

No. FDIC coverage applies to the account at the bank where the money is held. Once you initiate a transfer, the money is covered at the sending bank until it arrives at the receiving bank, where it is then covered by that bank's FDIC insurance. There is no gap in coverage.

Are savings accounts at online banks covered the same way as savings accounts at traditional banks?

Yes, if the online bank is FDIC-insured. Most major online banks are FDIC members and offer the same $250,000 coverage. However, some online savings products are not offered by banks and are not FDIC-insured, so you need to verify the institution's status before depositing.

What if the bank I use is not FDIC-insured?

Your deposits are not protected by federal insurance. If the bank fails, you become an unsecured creditor and may lose some or all of your money. You can verify a bank's FDIC status using the Bank Find tool on fdic.gov before opening an account.