Most online savings accounts are FDIC insured, but you need to check your specific bank

The short answer: if your online bank is a real bank — not a fintech app or investment platform — it almost certainly has FDIC insurance. But "almost certainly" is not the same as definitely. You should verify before you move money there, because the difference between insured and uninsured is the difference between your money being protected and potentially losing it if the bank fails.

FDIC insurance covers up to $250,000 per depositor, per bank, per account type. That means if you have $100,000 in a savings account at an online bank and that bank fails, the FDIC will return your $100,000. If you have $300,000, you get back $250,000 and lose $50,000. The insurance is automatic — you do not have to sign up or pay for it — but only if the bank actually carries it.

The reason you need to check is that some online financial companies call themselves banks but are not banks. They are apps that hold your money at a real bank behind the scenes, or they are investment platforms, or they are payment services. Those are different animals with different protections.

Key Takeaways

  • FDIC insurance is automatic at any bank that holds a federal charter or is a member of the Federal Reserve, but you should verify your specific bank's status on the FDIC website before opening an account.
  • The FDIC's BankFind tool lets you search by bank name and see exactly which accounts are insured and up to what amount.
  • Online banks owned by large traditional banks (like Ally, owned by Ally Financial) are insured the same way as their brick-and-branch counterparts.
  • Fintech apps and payment platforms that are not banks themselves may hold your money at an insured bank, but the protection depends on how they structure the account.
  • If you have more than $250,000 to deposit, you can spread it across multiple banks or use different account types at the same bank to stay fully insured.

How to check if your online bank is FDIC insured

The FDIC runs a free tool called BankFind at bankfind.org. You type in the name of the bank, and it tells you whether that bank is insured, which accounts are covered, and the insurance limit for each type. This is the official source — not the bank's website, not a review site, but the FDIC itself.

When you search, you will see a list of branches or locations. Click on any one, and you will see a page that lists every account type the bank offers and the insurance coverage for each. For example, it might show "Savings Accounts — $250,000 per depositor" and "Money Market Accounts — $250,000 per depositor." If an account type is not listed, it is not insured.

The bank's own website should also state clearly that it is FDIC insured, usually in small print at the bottom of the page or in a "Security" or "About Us" section. But the BankFind tool is the verification — if the bank does not show up there as insured, do not trust the bank's own claim.

Why some online banks are insured and others are not

To be FDIC insured, a bank must be chartered by either the federal government (through the Office of the Comptroller of the Currency) or a state, and it must be a member of the Federal Reserve or the FDIC itself. Most online banks meet these requirements because they are either subsidiaries of large traditional banks or they obtained their own charter.

Some online financial companies are not banks at all. They might be fintech platforms that partner with a real bank to hold customer deposits. In those cases, your money may still be insured, but the insurance is tied to the partner bank, not the app you are using. For example, if you use an app that holds your money at a partner bank, the FDIC insures the account at that partner bank — but you need to know which bank that is and verify it yourself.

A few online services are not banks and do not partner with banks for deposit accounts. They might be investment platforms, payment services, or cryptocurrency exchanges. Those accounts are not FDIC insured at all. If the company fails, your money is not protected by the FDIC.

What FDIC insurance actually covers in a savings account

FDIC insurance covers the balance in your account up to $250,000 if the bank fails. It does not cover losses from fraud, theft, or your own mistakes — only the risk that the bank itself becomes insolvent and closes.

The $250,000 limit applies per depositor, per bank, per account type. That means if you have a savings account and a checking account at the same FDIC-insured bank, each is covered up to $250,000 separately. If you have a joint account with your spouse at the same bank, that joint account is covered up to $250,000 as a separate category. But if you have two savings accounts at the same bank in your name alone, they are added together and covered as one account up to $250,000 total.

Interest earned on the account is covered as part of the balance. So if you have $200,000 in a savings account and earn $500 in interest before the bank fails, the FDIC covers the full $200,500 (up to the $250,000 limit).

Online banks owned by large traditional banks

If the online bank is owned by a large traditional bank — like Ally Bank (owned by Ally Financial), Marcus by Goldman Sachs, or Discover Bank — it is FDIC insured in the same way as the parent company's brick-and-mortar branches. You can verify this on BankFind by searching for the parent company's name or the online bank's name directly.

These banks are often called "online-only" because they do not have physical branches, but they are real banks with real FDIC insurance. The online-only model usually means lower fees and higher interest rates on savings accounts, because the bank does not have the overhead of maintaining branches.

What to do if your online bank is not FDIC insured

If you discover that your online bank is not FDIC insured, you have a few options. First, move your money to a bank that is insured. You can do this by transferring funds to another account or withdrawing cash. There is no penalty for moving your money out of an uninsured account.

Second, if the company is a fintech app that holds money at a partner bank, find out which bank that is and verify the partner bank's FDIC status on BankFind. The money may be insured even though the app itself is not a bank. Ask the company directly which bank holds the deposits, and then search that bank on BankFind.

Third, if you are using an uninsured service because you like its features or interest rate, understand that you are taking a risk. The risk is small if the company is well-established and well-funded, but it is real. Only you can decide whether the benefit is worth the risk.

How to stay fully insured if you have more than $250,000

If you have more than $250,000 to save, you can keep all of it insured by spreading it across multiple banks or using different account types at the same bank. Each bank and each account type is insured separately up to $250,000.

For example, you could put $250,000 in a savings account at Bank A and $250,000 in a savings account at Bank B, and both amounts would be fully insured. Or you could put $250,000 in a savings account and $250,000 in a money market account at the same bank, and both would be fully insured because they are different account types.

Joint accounts are also insured separately. If you and your spouse each have a savings account in your name alone at Bank A, each account is insured up to $250,000. If you also have a joint savings account at Bank A, that joint account is insured up to $250,000 as a separate category. So you could have $250,000 in your account, $250,000 in your spouse's account, and $250,000 in the joint account, all at the same bank, and all fully insured.

Frequently Asked Questions

Do I have to do anything to get FDIC insurance on my savings account?

No. FDIC insurance is automatic at any insured bank. You do not sign up for it, pay for it, or set up it. If your bank is FDIC insured, your account is covered the moment you open it. You only need to verify that your bank is insured before you move money there.

What happens to my money if the bank fails?

The FDIC takes over the bank's accounts and pays out deposits up to $250,000 per depositor, per account type. You will receive your money, usually within a few business days. The FDIC has a track record of paying out quickly — in recent bank failures, most depositors received their money within one to three days.

Does FDIC insurance cover money I lose to fraud or a scam?

No. FDIC insurance only covers losses from bank failure, not fraud, theft, or your own mistakes. If someone steals your login credentials and drains your account, or if you send money to a scammer, the FDIC does not cover that. Your bank may have fraud protection policies, but those are separate from FDIC insurance.

If I have money at two different online banks, are both accounts insured?

Yes. Each bank is a separate entity for FDIC purposes. If you have $200,000 at Bank A and $200,000 at Bank B, both amounts are fully insured because they are at different banks. The $250,000 limit applies per bank, not across all your accounts.

Can I call the FDIC to verify my bank's insurance status?

You can, but the BankFind tool is faster and more reliable. The FDIC's phone line is for specific questions about your account or a bank failure, not for routine verification. Use BankFind first — it is the official source and gives you when ready answers.