Yes. Certificates of deposit held at an FDIC-insured bank are protected by federal deposit insurance up to $250,000 per depositor, per bank, for each ownership category. Both your principal and any interest accrued as of the date of a bank failure count toward that limit, and coverage attaches automatically the moment you open the account. CDs are treated the same as savings and checking deposits for insurance purposes, so the question of whether CDs are FDIC insured comes down to two things: is the bank a member, and are you inside the limit.1FDIC.gov. Deposit Insurance – Understanding Deposit Insurance
Confirming Your Bank Is FDIC-Insured
Coverage only applies if the bank itself belongs to the program. Insured banks are required to display the official FDIC sign at teller windows where deposits are taken and on the digital banking pages where you log in or open accounts.2eCFR. 12 CFR Part 328 – FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo To verify independently, search the institution by name in the FDIC’s BankFind Suite at banks.data.fdic.gov.
One boundary worth knowing: a share certificate at a credit union is not an FDIC product. Federally insured credit unions are covered by the National Credit Union Administration’s Share Insurance Fund, which carries the same $250,000 per-member limit and the full faith and credit of the United States government behind it.3National Credit Union Administration. Share Insurance Coverage The protection works the same in practice; the agency is different.
How the $250,000 Limit Actually Works
The cap is $250,000 per depositor, per insured bank, for each ownership category, and it includes accrued interest. So a $245,000 five-year CD that has earned $8,000 in interest sits at an insured total of $253,000, with $3,000 uninsured.4FDIC.gov. Deposit Insurance FAQs This is the detail that surprises people: a CD opened safely below the limit can drift above it as interest compounds.
The FDIC adds together every deposit you hold in the same ownership category at the same bank. A $150,000 CD plus a $120,000 savings account, both in your name alone at one bank, come to $270,000, leaving $20,000 uninsured.5FDIC. Deposit Insurance At A Glance Accounts at a different FDIC-insured bank are covered separately, so opening a CD at a second bank gives you a fresh $250,000 there.6eCFR. 12 CFR 330.3 – General Principles
If your balances are large or spread across several products, the FDIC’s Electronic Deposit Insurance Estimator will tell you exactly how much is covered at a given bank and how much, if any, spills over.7FDIC. Electronic Deposit Insurance Estimator (EDIE) – Home
Using Ownership Categories to Cover More Than $250,000
The ownership category attached to an account determines which insurance pool it draws from. Deposits in different categories are insured separately at the same bank, and this is the primary way people legitimately protect more than $250,000 at one institution.
Single and Joint Accounts
A single-ownership account belongs to one person with no beneficiaries. All of your single-ownership deposits at one bank, whether CDs, savings, or checking, share a single $250,000 cap, and sole proprietorship accounts fold into this same category.8eCFR. 12 CFR 330.6 – Single Ownership Accounts
Joint accounts sit in a separate category. Each co-owner’s share across all qualifying joint accounts at that bank is insured up to $250,000, meaning a jointly owned CD can be covered up to $500,000 total. To qualify, each co-owner must have equal withdrawal rights.9eCFR. 12 CFR 330.9 – Joint Ownership Accounts If you hold both individual and joint accounts at the same bank, each category is insured on its own.
Trust Accounts With Beneficiaries
Adding beneficiaries through a payable-on-death designation or a formal trust can expand your coverage substantially. Trust deposits are insured at $250,000 per beneficiary, capped at $1,250,000 per trust owner at one bank once you name five or more beneficiaries. The FDIC combines all your trust deposits at that bank, whether informal revocable, formal revocable, or irrevocable, into a single calculation.10FDIC.gov. Trust Accounts Coverage scales with the number of beneficiaries: one beneficiary gets $250,000, two gets $500,000, and so on up to the ceiling.11FDIC.gov. Your Insured Deposits A married couple who each name the other plus three children could reach $2,500,000 in trust coverage at a single bank.12FEDERAL DEPOSIT INSURANCE CORPORATION. New Trust Account Rule Deposit Insurance Seminar For Bankers
Retirement Account CDs
CDs held inside a self-directed IRA, Roth IRA, SEP IRA, SIMPLE IRA, or self-directed 401(k) fall into a separate category called “certain retirement accounts.” All retirement deposits of these types at one bank are added together and insured up to $250,000.13FDIC.gov. Certain Retirement Accounts Naming beneficiaries on an IRA does not raise this cap the way it does for revocable trust accounts. A $180,000 traditional IRA CD and a $100,000 Roth IRA CD at the same bank combine to $280,000, leaving $30,000 uninsured.
Business Accounts
Corporations, partnerships, and unincorporated associations each get their own $250,000 of coverage, separate from the personal accounts of the owners. The entity has to be engaged in an independent activity; a shell created purely to multiply coverage will not qualify.14FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts The number of partners or signatories on the account does not change the limit.
Brokered CDs
A brokered CD is purchased through a brokerage firm rather than opened directly at a bank. These CDs qualify for FDIC insurance so long as the broker places the funds at an FDIC-insured institution, and the coverage passes through to you, the underlying owner, up to the standard $250,000 limit.15FDIC.gov. Deposit Broker’s Processing Guide The complication is documentation. If the bank fails, the FDIC needs the broker’s ownership records to identify the actual depositors, and payouts can be delayed until that paperwork is in hand. Before buying, confirm both that the issuing bank is insured and that your broker keeps clean ownership records.
What Isn’t Covered
Not every product sold in a bank lobby is a deposit. Mutual funds, annuities, life insurance policies, stocks and bonds, and crypto assets carry no FDIC protection, because they are investments with market risk.16FDIC.gov. Financial Products That Are Not Insured by the FDIC Stablecoins deserve a separate flag: their dollar peg can look like a guaranteed deposit, but under the GENIUS Act enacted in 2025, payment stablecoins are explicitly outside the FDIC insurance fund, and issuers are barred from advertising otherwise. Holding stablecoins through an FDIC-insured bank does not change that.
If Your Bank Fails or Merges
When a bank fails, the FDIC’s preferred fix is to have a healthy bank take over the deposits. In that case your CD simply transfers, and you keep access to your funds almost immediately.17FDIC.gov. Payment to Depositors If no acquirer steps in, the FDIC pays insured depositors directly by check, with a target of two business days from the date of failure. Most depositors do not file any paperwork; the FDIC works from the failed bank’s records. Accounts tied to trust agreements or brokered deposits can take slightly longer while the agency verifies ownership.
There is a small window CD holders often miss. When a failed bank’s deposits transfer to a new institution, you can withdraw your CD without an early withdrawal penalty. That option lasts until you sign a new deposit agreement with the acquiring bank, so if the new rates are worse than what you had, that is the moment to move.
Mergers work differently. If your bank is acquired by another FDIC-insured bank, you get a six-month grace period during which deposits from the old bank stay insured separately from any accounts you already hold at the acquirer, keeping a merger from suddenly pushing you over the limit.18FDIC. Merger of IDIs CDs that mature during or after that window have their own timing rules. If a merger notice would put your combined balance over $250,000, restructure the accounts before the grace period ends.
Money Above the Limit
Anything over $250,000 in a single ownership category is not automatically returned. It becomes a claim against the failed bank’s remaining assets and is handled through the FDIC’s receivership process, paid pro rata alongside other creditors as assets are liquidated. Recoveries can be partial and can take months or years. That is the practical reason to stay inside the limits: insured funds come back in days, uninsured funds do not.