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

The Federal Deposit Insurance Corporation (FDIC) covers savings accounts up to $250,000. That limit applies to each depositor at each bank. If you have $300,000 in a savings account at one bank, the FDIC protects $250,000 and you absorb the loss on the remaining $50,000 if the bank fails.

The $250,000 figure has been in place since 2010. It applies to most account types — savings accounts, money market accounts, and checking accounts all fall under the same limit. The coverage is automatic; you do not need to register or take any action to receive it.

The key word is per bank. If you have $250,000 at Bank A and $250,000 at Bank B, both amounts are fully covered because they are at different institutions. But $500,000 at a single bank means only $250,000 is protected.

Key Takeaways

  • FDIC coverage is $250,000 per depositor per bank, so amounts above that at a single institution are not protected if the bank fails.
  • The limit resets at each different bank, meaning you can protect more money by spreading deposits across multiple banks.
  • Joint accounts, retirement accounts, and trust accounts have separate $250,000 limits from your individual account at the same bank.
  • FDIC insurance covers the account balance as of the date the bank closes, not the current market value if you own investments within the account.
  • Coverage is automatic and free — you do not need to do anything to set up it or pay a fee.

How the $250,000 limit works across multiple accounts at one bank

A single bank can hold multiple account categories for you, and each category has its own $250,000 limit. Your individual savings account is one category. A joint account with your spouse is a separate category. A retirement account (IRA, 401(k) rollover) is another. A trust account is yet another.

This means you could have $250,000 in an individual savings account, $250,000 in a joint savings account with your spouse, and $250,000 in an IRA at the same bank, and all three amounts would be fully covered. The FDIC treats them as distinct depositors or account types for insurance purposes.

However, if you have two separate savings accounts in your name only at the same bank — say, one for an emergency fund and one for a vacation fund — they are combined and treated as a single $250,000 limit. The FDIC adds them together and covers up to $250,000 total across both accounts.

What happens if you exceed the limit at one bank

If your balance exceeds $250,000 at a single bank in a single account category, the excess is not covered by FDIC insurance. If the bank fails, you would lose that excess amount. This is a real risk: banks do fail, though rarely. The FDIC has closed or assisted 563 banks since 2001.

The uninsured portion does not disappear when ready. When a bank fails, the FDIC either arranges for another bank to take over the deposits or pays out the insured amounts directly. The process typically takes a few days to a few weeks. Any amount over $250,000 enters a claims process where you may recover some or all of it, but there is no may provide.

The safest approach for amounts over $250,000 is to split the money across multiple banks. A $500,000 savings account split into two $250,000 accounts at two different banks means both amounts are fully protected.

Account types that have separate coverage limits

The FDIC recognizes several distinct account categories, each with its own $250,000 limit at the same bank:

  • Individual accounts — savings, checking, and money market accounts in your name only.
  • Joint accounts — accounts held with one or more other people, where each co-owner is insured up to $250,000 for their share.
  • Retirement accounts — IRAs, SEP-IRAs, straightforward IRAs, and 401(k) rollovers, each covered up to $250,000.
  • Trust accounts — funds held in a revocable living trust, covered up to $250,000 per beneficiary (up to five beneficiaries).
  • Custodial accounts — accounts held for a minor, covered separately from the parent's individual account.
  • Accounts held for a business — sole proprietorships, partnerships, and corporations each have their own $250,000 limit.

Joint accounts work differently than you might expect. If you and your spouse have a joint savings account with $500,000, the FDIC covers $250,000 of your share and $250,000 of your spouse's share — meaning the full $500,000 is protected. But if you and two friends have a joint account with $500,000, each person's share is covered up to $250,000, so the full amount is still protected as long as no single person's share exceeds $250,000.

What FDIC insurance does and does not cover

FDIC insurance covers the cash balance in your account on the day the bank fails. It does not cover investment losses, market declines, or fees charged by the bank. If you have $250,000 in a savings account earning 4% interest, the FDIC covers the $250,000 principal, not the accrued interest (though interest accrued up to the date of failure is usually covered).

If your bank offers a brokerage service and you buy stocks, bonds, or mutual funds through that service, those investments are not covered by FDIC insurance. They are covered by SIPC (Securities Investor Protection Corporation) instead, which has different limits and rules. Money sitting in a cash sweep account at a brokerage may be FDIC-insured if it is held at a partner bank, but the coverage is separate from your regular bank account.

FDIC insurance also does not cover safe deposit boxes, valuables stored in the bank, or losses due to fraud or theft. If someone steals from your account, that is a separate matter handled by the bank's fraud procedures and your state's laws, not by FDIC insurance.

How to verify your coverage and organize accounts for maximum protection

The FDIC offers a tool called the FDIC Coverage Calculator on its website. You enter your bank name, account types, and balances, and it shows you exactly how much is covered. This is the most reliable way to check your coverage, especially if you have multiple account types or joint accounts.

If you want to protect more than $250,000 at a single bank, open accounts at different banks. There is no limit to how many banks you can use. You could have $250,000 at Bank A, $250,000 at Bank B, $250,000 at Bank C, and so on, with each amount fully covered.

Keep records of which accounts are at which banks and what type each account is. If a bank fails, the FDIC will contact you, but having your own documentation speeds up the process. Write down the bank name, account number, account type, and balance for each account you hold.

Frequently Asked Questions

Does FDIC insurance cover money market accounts?

Yes. Money market accounts held at FDIC-insured banks are covered up to $250,000 per depositor per bank, the same as savings accounts. The coverage is automatic and does not depend on the interest rate or the account terms.

If I have $250,000 in a savings account and $250,000 in a checking account at the same bank, are both covered?

No. The FDIC combines all individual deposit accounts (savings, checking, money market) in your name at the same bank and covers the total up to $250,000. You would need to move one account to a different bank to protect both amounts fully.

What if my spouse and I have a joint account with $500,000 — is all of it covered?

Yes. Joint accounts are a separate category from individual accounts. The FDIC covers up to $250,000 of each owner's share. With two owners, that means $500,000 total is covered. If you add a third owner, the limit stays at $250,000 per person, so $750,000 would be fully covered.

Does FDIC insurance cover my IRA at the same bank where I have a savings account?

Yes, but they are separate. Your IRA has its own $250,000 limit, and your individual savings account has its own $250,000 limit at the same bank. You could have $250,000 in each and both would be fully covered.

What happens to my money if the bank fails?

The FDIC either arranges for another bank to take over your account (you keep your money and may switch banks) or pays you directly up to $250,000. The process usually takes a few days to a few weeks. Amounts over $250,000 enter a claims process where recovery is not may provide.