An FDIC single ownership account is insured up to $250,000 per depositor at each insured bank, and that limit covers both your principal and any interest accrued through the day the bank fails.1Federal Deposit Insurance Corporation. Deposit Insurance FAQs The catch most depositors miss: the FDIC adds together every deposit you hold in your name alone at the same bank before applying that cap. Opening a second checking account, a money market, or a CD at the same institution does nothing to raise your protection.
What Counts as a Single Ownership Account
A single ownership account is any deposit owned by one natural person with no co-owners and no beneficiaries named to receive the funds at death.2eCFR. 12 CFR 330.6 – Single Ownership Accounts Individual checking, savings, money market deposit accounts, and CDs held in one name all fall in this bucket. The moment you add a payable-on-death or in-trust-for beneficiary, the account leaves single ownership and moves into the revocable trust category, which has its own coverage rules.3Federal Deposit Insurance Corporation. Your Insured Deposits
Sole proprietorship deposits count too. If you run a business as a DBA, the FDIC treats those funds as yours personally, and your business checking balance is combined with every other single ownership deposit you hold at that bank.2eCFR. 12 CFR 330.6 – Single Ownership Accounts This trips up small business owners: $180,000 in a business account plus $120,000 in personal savings at the same bank leaves $50,000 uninsured.
Deposits of a deceased person’s estate are also single ownership. The FDIC treats the deceased as the sole owner and aggregates estate funds with any other single accounts that person held at the bank. Estate beneficiaries do not get separate coverage on those funds.4Federal Deposit Insurance Corporation. Financial Institution Employees Guide to Deposit Insurance – Single Accounts
Funds Managed by Someone Else on Your Behalf
If an agent, nominee, guardian, custodian, or conservator holds deposits for you, those funds are insured as if you had deposited them directly.5eCFR. 12 CFR 330.7 – Accounts Held by an Agent, Nominee, Guardian, Custodian or Conservator This covers Uniform Transfers to Minors Act accounts and escrow accounts. The manager’s personal deposits stay separate, but the money they hold for you is added to your other single ownership balances at that bank.
How the $250,000 Limit Is Calculated
The standard maximum deposit insurance amount, defined in federal regulation as the SMDIA, is $250,000.6eCFR. 12 CFR 330.1 – Definitions Coverage runs dollar-for-dollar on principal plus interest accrued through the closing date.1Federal Deposit Insurance Corporation. Deposit Insurance FAQs So $248,000 in principal with $3,000 in accrued interest on failure day totals $251,000, and $1,000 is uninsured.
The cap applies per depositor, per bank, per ownership category. That last piece opens up real planning room. Retirement accounts such as IRAs, 401(k)s, and SEP-IRAs sit in a separate category called Certain Retirement Accounts, which carries its own $250,000 limit.7Federal Deposit Insurance Corporation. Certain Retirement Accounts Your IRA deposits at a bank are not combined with your personal checking or savings when the FDIC tallies coverage. Someone can hold $250,000 in single ownership deposits and $250,000 in an IRA CD at the same bank with both fully insured.
How Aggregation Works Across Your Accounts
The FDIC totals every deposit you own in the same ownership category at one bank regardless of product type or how many accounts you have.8Federal Deposit Insurance Corporation. Financial Institution Employees Guide to Deposit Insurance – General Principles of Insurance Coverage A $200,000 CD plus a $100,000 checking account equals $300,000 in single ownership, of which only $250,000 is insured. Different opening dates, different purposes, and slight variations in how your name appears do not create separate coverage. The FDIC looks at the legal owner.
The agency offers a free calculator, the Electronic Deposit Insurance Estimator (EDIE), where you enter every account you hold at a specific bank and see what is covered and what exceeds the limit.9Federal Deposit Insurance Corporation. Electronic Deposit Insurance Estimator (EDIE) Running your deposits through it once a year takes a few minutes.
Increasing Coverage at One Bank
The simplest way to insure more than $250,000 at a single bank is to hold deposits in different ownership categories. Naming a POD beneficiary shifts an account to the revocable trust category, which insures up to $250,000 per unique beneficiary, with a ceiling of $1,250,000 at five or more beneficiaries.3Federal Deposit Insurance Corporation. Your Insured Deposits A joint account with a spouse opens another category. Married couples can layer single, joint, revocable trust, and retirement deposits to insure well over $1 million at one institution.
What FDIC Insurance Does Not Cover
Plenty of products sold inside bank branches carry no FDIC protection at all. The following are excluded even when purchased at an insured bank:10Federal Deposit Insurance Corporation. Understanding Deposit Insurance
- Stocks, bonds, and mutual funds, which are securities rather than deposits.
- Annuities and life insurance policies, regulated separately from banking deposits.
- U.S. Treasury securities, backed by the full faith and credit of the federal government but not by the FDIC.
- Crypto assets, regardless of where purchased.
- Safe deposit box contents, including the box itself and everything inside.
If a product can lose value based on market performance, the FDIC does not backstop it, and nothing about buying it at your usual branch changes that.
Coverage Across Separate Banks
FDIC coverage applies independently at each separately chartered bank. You can hold $250,000 in single ownership deposits at one institution and another $250,000 at a different institution, and both are fully insured.10Federal Deposit Insurance Corporation. Understanding Deposit Insurance Branches of the same bank are always aggregated no matter how far apart they sit geographically.
Different brand names do not always mean different banks. Many banks operate under trade names, and deposits at what looks like a separate institution may run through the same charter. The FDIC’s BankFind Suite lets you search any bank name and confirm whether it is a separately chartered institution or a trade name.11Federal Deposit Insurance Corporation. Enhanced FDIC Tool Helps Consumers Identify Unfamiliar Banks and Websites Search results list the official name and FDIC certificate number. Two banks sharing a certificate number are one institution for insurance purposes, and your deposits will be aggregated. The FDIC also has deposit insurance specialists at 1-877-275-3342.
What Happens If Your Bank Fails
For insured deposits, the FDIC moves quickly. Federal law requires payment of insured deposits as soon as possible after a bank closes, and that generally means within a few business days.12Office of the Law Revision Counsel. 12 USC 1821 – Insurance Funds Payment arrives as a check or as a transferred deposit at another insured bank in the area.
Anything above the insured limit follows a different path. Uninsured depositors have a higher claim priority than general creditors and stockholders, but actual recovery depends on what the FDIC can extract from the failed bank’s assets during liquidation.13Federal Deposit Insurance Corporation. Priority of Payments and Timing Disbursements on uninsured balances can take months or years, and in some failures the assets are not there at all. Depositors with uninsured balances have recovered nothing beyond the insured portion in the worst cases.14Federal Deposit Insurance Corporation. FAQs Regarding Determination of Insufficient Assets
Grace Periods After Mergers and Deaths
When an FDIC-insured bank acquires another, depositors at the acquired bank get a six-month grace period. During that window, deposits from the acquired bank are insured separately from any accounts you already held at the acquiring bank.15Federal Deposit Insurance Corporation. Financial Institution Employees Guide to Deposit Insurance – Merger of IDIs After six months, everything is aggregated under the normal rules. A CD that matures after the grace period stays separately insured until its maturity date. If your bank is being acquired and the combined deposits would exceed $250,000, you have six months to move funds elsewhere.
When the owner of a single ownership account dies, the FDIC provides a six-month grace period during which the deceased’s accounts are insured as if the owner were still alive.16Federal Deposit Insurance Corporation. Death of an Account Owner That gives an executor or administrator time to retitle accounts without a coverage gap. The grace period only helps; it never reduces coverage that would otherwise apply.