FDIC insurance covers up to $250,000 per depositor, per bank, per account category

The Federal Deposit Insurance Corporation (FDIC) protects money you keep in a savings account at a bank it insures. If the bank fails, the FDIC pays you back up to $250,000. This limit applies to each depositor at each bank — so if you have $300,000 in savings at one FDIC-insured bank, only $250,000 is protected, and you lose $50,000.

The $250,000 limit is per account category, not per account. This means if you have a regular savings account and a money market account at the same bank, each category is covered separately up to $250,000. A joint account where two people own the money together is also a separate category — each owner's share is covered up to $250,000.

Credit unions use a similar system called NCUA insurance (National Credit Union Administration), which also covers up to $250,000 per member per credit union. If you bank at multiple credit unions, each one's coverage is separate.

Key Takeaways

  • FDIC insurance protects up to $250,000 per person per bank, so money over that amount at a single bank is not protected if the bank fails.
  • Different account categories at the same bank are covered separately — a joint account and a single account are two different $250,000 limits.
  • You can spread money across multiple FDIC-insured banks to protect more than $250,000 total, since each bank's coverage is independent.
  • Credit unions offer NCUA insurance with the same $250,000 limit per member per credit union, and the coverage works the same way as FDIC.
  • Not all banks are FDIC-insured — you can check a bank's status on the FDIC website before you open an account.

How the $250,000 limit breaks down by account type

The FDIC groups accounts into categories, and each category gets its own $250,000 protection at the same bank. A single savings account is one category. A joint account (where two or more people own it together) is a separate category, and each owner's share is covered up to $250,000. So if you and your spouse have a joint savings account with $300,000, the FDIC covers all $300,000 because it is split between two owners ($150,000 each).

A retirement account (like an IRA) is also a separate category with its own $250,000 limit. Money you hold in trust for someone else — such as a parent holding money in a custodial account for a child — is another category. If you are a trustee managing money for a trust, that money is covered separately from your personal accounts.

Accounts held in different names are not covered together. If you have a savings account in your name and another in your spouse's name at the same bank, each account is covered up to $250,000 separately. The bank does not combine them.

What happens if your bank fails

When an FDIC-insured bank fails, the FDIC steps in and pays depositors directly. You do not have to file a claim or take any action — the FDIC automatically identifies all accounts at the failed bank and pays out the insured amounts. The process usually takes a few days to a few weeks, depending on how many accounts the bank held.

The FDIC pays you through the same method you normally use to access your account. If you have direct deposit set up, the FDIC can deposit your money directly into another account you specify. If you prefer a check, the FDIC will mail one. You can contact the FDIC to tell them where to send your money, or they will use the address on file at the failed bank.

Money over the $250,000 limit at a failed bank is not automatically protected, but it may be recovered later if the FDIC sells the bank's assets. Recovery is uncertain and can take years, so it is not something to count on.

Spreading money across multiple banks to protect more than $250,000

If you have more than $250,000 in savings, you can protect all of it by opening accounts at different FDIC-insured banks. Each bank's FDIC coverage is independent, so $250,000 at Bank A and $250,000 at Bank B are both fully protected. You can have as many accounts at as many banks as you want — there is no limit on the number of banks you use.

Online banks and brick-and-mortar banks are covered the same way. An online bank owned by a large financial company is still a separate FDIC-insured entity, so money there is covered separately from money at the parent company's other banks. For example, if a large bank owns multiple online brands, each brand is a separate FDIC-insured bank with its own $250,000 limit.

Keep track of how much you have at each bank so you do not accidentally go over $250,000 at one institution. A spreadsheet with bank names, account types, and balances takes a few minutes to set up and can save you from losing money.

Accounts and money that are not covered by FDIC insurance

FDIC insurance only covers deposits — money sitting in the bank. It does not cover investments like stocks, bonds, mutual funds, or brokerage accounts, even if you buy them through your bank. If you have a brokerage account at your bank, that money is not FDIC-insured. Investments are covered by a different system called SIPC (Securities Investor Protection Corporation), which has different limits and rules.

Safe deposit boxes are not covered by FDIC insurance. If you keep cash, jewelry, or documents in a safe deposit box at a bank and the bank fails, the FDIC does not protect the contents. Safe deposit boxes are your responsibility — the bank is only storing them, not insuring them.

Money you owe the bank — such as an overdraft or a loan — is not covered. If you have a negative balance in your account because you overdrew it, the FDIC does not protect that debt. The bank can use your deposits to pay off what you owe before the FDIC pays you.

How to verify your bank is FDIC-insured

You can check whether a bank is FDIC-insured on the FDIC website using their BankFind tool. Go to bankfind.org, enter the bank's name and state, and the tool will tell you whether it is insured and show you the bank's FDIC certificate number. If a bank does not appear in BankFind, it is not FDIC-insured, and your money there is not protected by federal insurance.

Some banks advertise that they are "FDIC-insured" but are actually insured by a private company instead. Private insurance is not the same as FDIC insurance and may not protect your money in the same way. Always verify directly through the FDIC website rather than trusting the bank's marketing materials.

If you are unsure whether a specific account type (like a trust account or a custodial account) is covered, you can contact the FDIC directly at 1-877-275-3342 or use their online coverage calculator at fdic.gov. They can tell you exactly how much of your money is protected based on your account setup.

Frequently Asked Questions

If I have $500,000 in one savings account, how much is protected?

Only $250,000 is protected by FDIC insurance. The remaining $250,000 is not covered if the bank fails. To protect all $500,000, you would need to split it between two FDIC-insured banks, keeping $250,000 or less at each one.

Does FDIC insurance cover money in a joint account differently?

Yes. In a joint account, each owner's share is covered up to $250,000 separately. If you and your spouse have a joint account with $400,000, the FDIC covers all $400,000 because it is split between two owners. If the account held $600,000, only $500,000 would be covered ($250,000 per owner).

What if I have accounts at two different branches of the same bank?

Branches do not matter — they are all the same bank for FDIC purposes. If you have $300,000 across multiple branches of Bank A, only $250,000 is protected total. The FDIC combines all your accounts at the same bank when calculating coverage.

Are online banks covered by FDIC insurance?

Most online banks are FDIC-insured, but not all. Check the bank's website or use the FDIC BankFind tool to confirm. If an online bank is FDIC-insured, your money is covered the same way as at a traditional bank — up to $250,000 per account category.

Does FDIC insurance cover money in a retirement account (IRA)?

Yes, but it is a separate category. An IRA at a bank is covered up to $250,000 independently from your regular savings account at the same bank. If you have both an IRA and a savings account at the same FDIC-insured bank, each is covered up to $250,000.