Your money in a bank savings account is protected up to $250,000 per depositor per bank by the Federal Deposit Insurance Corporation (FDIC)

The FDIC is a federal agency that insures deposits at member banks if the bank fails. This means if your bank closes, you will get your money back up to the limit, even if the bank has no money left. The FDIC has insured deposits since 1933, and no depositor has lost a single penny of FDIC-insured funds in that time.

The $250,000 limit applies to each depositor at each bank separately. If you have $250,000 in savings at Bank A and $250,000 at Bank B, both amounts are fully protected. If you have $300,000 at one bank, only $250,000 is covered, and you lose the rest if the bank fails.

Your savings account is also protected from theft and fraud through other means. Your bank uses encryption to protect your account online, and federal law limits your liability if someone steals your debit card or hacks your account. If you report unauthorized transactions within 60 days, you are not responsible for them.

Key Takeaways

  • The FDIC insures up to $250,000 per depositor per bank, so money in a savings account at a member bank is protected if the bank fails.
  • The $250,000 limit resets at each different bank, so you can spread money across multiple banks to protect more than $250,000 total.
  • FDIC insurance covers the account balance as it stands on the day the bank closes, not future interest or deposits made after closure.
  • Not all banks are FDIC members — credit unions use NCUA insurance instead, which works the same way but covers up to $250,000 per account type.
  • Your liability for fraud or theft is capped at $50 if you report it within two business days, or $500 if you report it within 60 days.

Which banks are covered by FDIC insurance

Most banks in the United States are FDIC members. You can search the FDIC's bank database at fdic.gov/BankFind to confirm your bank is insured. The search tool shows you the exact coverage limits for each account type you hold there.

Some banks are not FDIC members. These are rare and usually very small or specialized. If your bank is not listed in the FDIC database, your deposits are not protected by federal insurance, and you should move your money to an FDIC member bank.

Online banks are FDIC members just like brick-and-mortar banks. The FDIC does not distinguish between them. An online savings account at an FDIC member bank has the same $250,000 protection as a savings account at a bank with physical branches.

How coverage works when you have multiple accounts at one bank

The FDIC insures by account ownership type, not by account number. If you have a savings account and a checking account at the same bank, both are covered separately up to $250,000 each, because they are different account types. A joint savings account is also a separate category — it is insured up to $250,000 for the account itself, separate from any individual accounts you hold.

If you have two savings accounts at the same bank in your name alone, the FDIC adds them together and insures the total up to $250,000. You cannot get $250,000 coverage for each account by giving them different names or purposes. The bank will combine them for insurance purposes.

A retirement account (IRA) at a bank is insured separately from your other accounts. An IRA savings account is covered up to $250,000 on its own, separate from your regular savings account. This means you can hold $250,000 in a regular savings account and $250,000 in an IRA at the same bank, and both are fully protected.

What happens to your money if a bank fails

When a bank fails, the FDIC steps in and either arranges for another bank to buy the failed bank's deposits, or it pays you directly. In most cases, another bank takes over the deposits within one or two business days. You keep your account number and can access your money immediately at the new bank.

If no bank takes over your account, the FDIC mails you a check for the insured amount within a few weeks. During this time, you cannot access your money, but you will receive the full amount you are owed up to $250,000. Any amount over $250,000 is lost unless the bank recovers enough money to pay depositors beyond the insurance limit.

Bank failures are rare. The FDIC has closed fewer than 600 banks since 1933. The last major wave of closures was during the 2008 financial crisis. Since then, bank failures have been uncommon, and most banks that fail are small regional institutions, not large national banks.

Protecting money beyond the $250,000 limit

If you have more than $250,000 to keep safe, you can split it across multiple FDIC member banks. Each bank covers you up to $250,000, so $500,000 spread across two banks is fully protected. There is no limit to how many banks you can use.

Some people use a strategy called "laddering" — opening accounts at different banks specifically to maximize FDIC coverage. This is legal and straightforward. You simply open a savings account at Bank A, another at Bank B, and so on, and keep each balance under $250,000.

You can also use different account types at the same bank to increase coverage. A regular savings account, a joint account with your spouse, and an IRA are three separate categories, each insured up to $250,000. This lets you hold up to $750,000 at one bank if you use all three account types.

Risks that FDIC insurance does not cover

FDIC insurance protects you only if the bank fails. It does not protect you from your own mistakes, such as giving your password to someone or sending money to a scammer. If you transfer money out of your account voluntarily, even to a fraudster, the FDIC does not reimburse you.

FDIC insurance also does not cover investment products sold by the bank, such as stocks, bonds, or mutual funds. If you buy a stock through your bank and the stock loses value, the FDIC does not cover that loss. Only deposits in savings accounts, checking accounts, and money market accounts are insured.

Safe deposit boxes are not insured by the FDIC. If you keep cash, jewelry, or documents in a safe deposit box at a bank and the bank fails, you lose the contents. The FDIC only insures money in deposit accounts, not physical items stored in boxes.

Credit unions and NCUA insurance

Credit unions are not banks and do not use FDIC insurance. Instead, they use NCUA insurance (National Credit Union Administration), which works the same way. NCUA covers up to $250,000 per depositor per credit union, just like the FDIC.

The coverage rules are identical to FDIC insurance. You can check whether your credit union is NCUA insured at mycreditunion.gov. Almost all credit unions in the United States are NCUA members.

If you use both a bank and a credit union, your deposits are insured separately. $250,000 at a bank and $250,000 at a credit union are both fully protected, because they are different institutions using different insurance systems.

Frequently Asked Questions

What if I have more than $250,000 at one bank and it fails?

You will receive $250,000 from the FDIC. Any amount over that is lost unless the bank recovers enough money to pay depositors beyond the insurance limit, which is rare. To protect more than $250,000, you must split it across multiple banks.

Does FDIC insurance cover money I lose to a scam?

No. FDIC insurance only covers bank failure, not fraud or theft. If you send money to a scammer, the FDIC does not reimburse you. However, if someone steals your debit card or hacks your account without your permission, federal law limits your liability to $50 if you report it within two business days.

Are online banks as safe as banks with branches?

Yes, if they are FDIC members. An online bank's deposits are insured the same way as a traditional bank's deposits. You can search the FDIC database to confirm your online bank is a member. The main difference is that online banks have no physical locations, not that they are less safe.

If my bank is bought by another bank, is my money still protected?

Yes. A bank merger is not a bank failure. Your deposits remain insured by the FDIC at the new bank. Your account may be transferred to the new bank's system, but your coverage does not change.

Can I get FDIC insurance on savings accounts at multiple banks?

Yes. Each bank insures you separately up to $250,000. You can open accounts at as many banks as you want, and each account is covered independently. This is a common way to protect large amounts of money.