The FDIC insures up to $250,000 per depositor, per insured bank, for each account ownership category.1Office of the Law Revision Counsel. 12 USC 1821 – Insurance Funds One person with deposits at one bank in one ownership category is covered up to that amount. The same person can protect much more by using different ownership categories at the same bank, or by spreading deposits across more than one insured bank.
What Counts Toward Your $250,000
The $250,000 limit covers your principal plus any interest that has accrued through the day the bank closes. A CD with a $245,000 principal and $7,000 in accrued interest totals $252,000, so $2,000 sits outside coverage.2FDIC.gov. Deposit Insurance FAQs If your balances run close to the ceiling, the interest matters.
Coverage applies to traditional deposit products held at insured banks:3FDIC.gov. Your Insured Deposits
- Checking accounts, interest-bearing or not
- Savings accounts, including NOW accounts
- Money market deposit accounts
- Certificates of deposit
- Cashier’s checks and money orders issued by the bank4FDIC.gov. Deposit Insurance at a Glance
Investments you might buy through a bank branch are not deposits and are not covered. Stocks, bonds, mutual funds, annuities, life insurance policies, municipal securities, crypto assets, and Treasury securities all fall outside FDIC insurance.5FDIC.gov. Financial Products That Are Not Insured by the FDIC Safe deposit box contents are also excluded, because a box is storage space rather than a deposit account.6FDIC.gov. Five Things to Know About Safe Deposit Boxes, Home Safes and Your Valuables
How Ownership Categories Multiply Your Coverage at One Bank
The $250,000 limit applies separately to each ownership category you use at the same bank. So one person can hold well above $250,000 at a single institution as long as the money sits in different categories recognized by federal regulation.7eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
Single Accounts
Any deposit owned by one person with no named beneficiaries is a single ownership account, insured up to $250,000. All your individual checking, savings, and CD balances at the same bank are added together toward that one limit.
Joint Accounts
A joint account gives each co-owner $250,000 of coverage. Two people on the same account can protect up to $500,000, and that coverage is separate from what either person holds in individual accounts at the same bank.
Trust Accounts
Revocable and irrevocable trust accounts are insured based on the number of eligible beneficiaries named by each owner, up to $250,000 per beneficiary. The ceiling per trust owner at one bank is $1,250,000, reached at five beneficiaries. Adding a sixth does not add coverage.8FDIC.gov. Trust Accounts
To get this treatment, the bank’s records must identify the account as a trust and identify the beneficiaries. For payable-on-death and similar informal trusts, beneficiaries must be specifically named in the deposit records. For formal trusts, the account title must include language identifying it as a trust account.
Retirement Accounts
Certain retirement deposits get their own $250,000 slot at each bank, separate from your other categories. The eligible types include Traditional and Roth IRAs, SEP IRAs, SIMPLE IRAs, self-directed 401(k) plans, self-directed Keogh plans, and Section 457 deferred compensation plans.9FDIC.gov. Certain Retirement Accounts
All of your qualifying retirement deposits at the same bank are added together toward that single $250,000 cap. Hold a $180,000 Traditional IRA and a $100,000 Roth IRA at one bank, and $30,000 of the combined $280,000 is uninsured. Naming beneficiaries on a retirement account does not raise the limit.
Business Accounts
Deposits owned by a corporation, partnership, or LLC are insured up to $250,000 separately from the personal accounts of the owners, officers, or partners. The entity has to be validly formed under state law and engaged in a legitimate business purpose, not set up just to expand coverage.10FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts
Sole proprietorships are treated differently. Their deposits are combined with the owner’s personal single ownership accounts at the same bank toward one $250,000 limit.
Employee Benefit Plan Accounts
Deposits held by a pension plan, profit-sharing plan, or similar employee benefit plan are insured on a pass-through basis, so each participant’s share is covered up to $250,000. For a defined contribution plan, the participant’s share is the account balance on the day the bank fails.11FDIC.gov. Employee Benefit Plan Accounts
Using More Than One Bank
The $250,000 ceiling applies independently at each FDIC-insured bank. Keep $250,000 at Bank A and $250,000 at Bank B, and both balances are fully insured.12FDIC.gov. Deposit Insurance – Understanding Deposit Insurance This is the most direct way to protect sums larger than any one bank can cover.
Some cash management and sweep programs do this for you, spreading a single deposit across a network of insured banks. These rely on pass-through insurance, where a third party places funds at banks on your behalf. For the coverage to reach you, the bank’s records or the third party’s records must identify you as the actual owner and show how much you own.13FDIC.gov. Pass-through Deposit Insurance Coverage If those recordkeeping requirements are not met, the pooled money may be insured only to $250,000 total in the third party’s name.
Bank Mergers and the Six-Month Grace Period
If one insured bank acquires another, the acquired bank’s deposits keep separate insurance from the acquiring bank’s deposits for at least six months. That window gives you time to restructure if the combined balances would otherwise push you above $250,000 at the merged institution.14FDIC.gov. Financial Institution Employee’s Guide to Deposit Insurance – Merger of IDIs
After the grace period, all your deposits at the combined bank are aggregated under the standard limits. A CD from the acquired bank that matures within the six months and is renewed for a different amount or term loses its separate coverage when the grace period ends. The grace period does not apply when two business entities merge; those accounts combine immediately.
Credit Unions
Deposits at a credit union are not covered by the FDIC. They are insured by the National Credit Union Share Insurance Fund, administered by the NCUA, at the same $250,000 per depositor, per insured credit union, per ownership category.15NCUA. Share Insurance Coverage
Confirming Your Bank Is FDIC-Insured
Not every institution taking deposits is FDIC-insured. You can check using the FDIC’s BankFind Suite, a free search tool that looks up banks by name or location.16FDIC.gov. Data Tools Insured banks are required to display the official FDIC sign at teller windows and other places where deposits are taken, and to show the FDIC digital sign on websites and mobile apps where you can make deposit transactions.17eCFR. 12 CFR Part 328 – FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC Name or Logo