IRAs are FDIC insured only when the IRA is held at an FDIC-member bank and the money sits in deposit products like savings accounts, CDs, or money market deposit accounts. Coverage is capped at $250,000 per depositor at each bank, and it protects you if the bank fails, not if your investments lose value. If your IRA is at a brokerage and holds stocks, bonds, or mutual funds, the FDIC does not cover it at all; a separate program called SIPC applies instead. Credit union IRAs get equivalent protection through the NCUA.
What the FDIC Actually Covers Inside an IRA
The Federal Deposit Insurance Corporation insures IRA deposits held at member banks up to $250,000 per depositor.1FDIC. Certain Retirement Accounts Coverage triggers only if the bank itself fails. When that happens, the FDIC pays insured deposits promptly, usually by arranging a transfer to another bank or mailing checks directly.2FDIC.gov. Priority of Payments and Timing
The rule everyone misses: only deposit products qualify. The following are covered when held inside an IRA at an FDIC-insured bank:
- Savings accounts
- Certificates of deposit (CDs)
- Money market deposit accounts
- Checking accounts
These qualify because they are direct obligations of the bank.3FDIC. Are My Deposit Accounts Insured by the FDIC?
The following do not qualify, even when you buy them through an FDIC-insured bank:
- Stocks, bonds, and mutual funds. Their value moves with the market, and the government does not reimburse investment losses.4Federal Deposit Insurance Corporation. Financial Products That Are Not Insured by the FDIC
- Annuities and life insurance. These are backed by the issuing insurance carrier, not a federal fund.4Federal Deposit Insurance Corporation. Financial Products That Are Not Insured by the FDIC
- Alternative assets in self-directed IRAs. Real estate, precious metals, cryptocurrency, and private equity receive no FDIC, NCUA, or SIPC coverage.
One product name causes real confusion. A money market deposit account is an FDIC-insured bank product. A money market mutual fund is a security. They sound alike but carry very different protections.5Federal Deposit Insurance Corporation. Understanding Deposit Insurance
How the $250,000 Limit Is Calculated
The limit is not per account. It is per depositor, per bank, applied across all retirement accounts in the FDIC’s “certain retirement accounts” category. Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs held at the same bank are added together.1FDIC. Certain Retirement Accounts If you have $150,000 in a traditional IRA and $130,000 in a Roth IRA at the same bank, the combined $280,000 leaves $30,000 uninsured.
Aggregation reaches further than IRAs alone. Self-directed 401(k) plans, Section 457 deferred compensation plans, and self-directed Keogh plans all fall into the same insurance category and get combined with your IRAs at that institution. Naming beneficiaries does not create additional coverage. The FDIC aggregates by the depositor’s ownership regardless of who is listed as a beneficiary.1FDIC. Certain Retirement Accounts
What does add coverage is a second bank. Each FDIC-insured institution provides its own independent $250,000 limit, so moving part of your IRA deposits to a different bank gives you a fresh $250,000 at that second bank.6Federal Deposit Insurance Corporation. FDIC Electronic Deposit Insurance Estimator FAQs The retirement account category is also separate from other ownership categories at the same bank, so your personal checking and savings sit under their own $250,000 limit.
Brokerage IRAs Fall Under SIPC, Not the FDIC
Most IRAs today live at brokerage firms and hold stocks, bonds, and mutual funds. Those accounts get no FDIC coverage. They fall under the Securities Investor Protection Corporation, which covers up to $500,000 in securities and cash per separate account capacity, with a $250,000 sub-limit for cash alone.7SIPC. What SIPC Protects
SIPC works differently from FDIC insurance in one important respect: it protects you if your brokerage firm fails and your assets go missing. It does not protect you against investment losses. If your IRA drops 30% because the market falls, SIPC offers nothing.7SIPC. What SIPC Protects
SIPC treats different account types as separate capacities. A traditional IRA and a Roth IRA at the same brokerage each get their own $500,000 coverage, and an individual taxable account counts as another capacity.8SIPC. Investors with Multiple Accounts Two traditional IRAs at the same brokerage, however, share a single $500,000 limit because they fall under the same capacity.
SIPC does not cover commodity futures, foreign exchange trades, fixed annuity contracts not registered with the SEC, or unregistered digital asset securities.7SIPC. What SIPC Protects Many large brokerages also carry supplemental private insurance that extends coverage beyond SIPC limits, though those policies vary by firm.
Credit Union IRAs Are Covered by the NCUA
If your IRA is at a federally insured credit union, the National Credit Union Share Insurance Fund provides the same $250,000 coverage. The fund is backed by the full faith and credit of the United States government and administered by the NCUA.9National Credit Union Administration. Share Insurance Fund Overview Credit unions call deposits “shares,” but the practical protection for an IRA works the same way it does at a bank, and IRA and Keogh retirement accounts are protected separately up to $250,000.10National Credit Union Administration. Share Insurance Coverage
What to Do If Your IRA Deposits Exceed $250,000
Any amount above $250,000 at a single bank is uninsured. If the bank fails, you become a creditor of the failed institution for that excess. The FDIC pays insured deposits promptly, but recovery of uninsured funds depends on how quickly the FDIC can sell the failed bank’s remaining assets, and full recovery is not guaranteed.2FDIC.gov. Priority of Payments and Timing
The simplest fix is spreading IRA deposits across multiple FDIC-insured banks so each gets its own $250,000 limit. Some banks also participate in deposit networks such as IntraFi that automatically distribute large balances across multiple member banks in increments below $250,000, letting you work with one institution while accessing aggregate coverage well beyond the standard limit. Ask your bank whether it offers this option.
Many brokerage firms operate cash sweep programs that move uninvested cash into deposit accounts at one or more affiliated banks, each providing separate FDIC coverage. If your brokerage uses this approach, your total FDIC-insured capacity depends on how many affiliated banks participate, and you are responsible for tracking whether those sweep deposits overlap with any other accounts you already hold at the same banks.
How to Confirm Your Institution Is Actually Insured
Before assuming your IRA is protected, verify that your institution belongs to the relevant program. The FDIC’s BankFind tool at banks.data.fdic.gov confirms insured status for any bank by name. The NCUA’s Credit Union Locator at mapping.ncua.gov does the same for credit unions. SIPC members are listed at sipc.org.
Not every institution that accepts deposits is federally insured. Private banks, some online platforms, and fintech apps that partner with banks may or may not carry FDIC coverage depending on how they are structured. If you are using a newer financial product or app for your IRA, find the specific bank where your funds are actually custodied and check that bank’s FDIC membership directly. Pass-through coverage requires that the bank’s records clearly identify you as the actual owner of the funds.11FDIC.gov. Pass-through Deposit Insurance Coverage