The FDIC insures up to $250,000 per depositor per bank

The Federal Deposit Insurance Corporation (FDIC) protects money you keep in a savings account at a bank that participates in the program. If the bank fails, the FDIC pays you back up to $250,000 per account category. This limit applies to each bank separately — if you have accounts at two different banks, each one is covered up to $250,000.

The $250,000 limit has been in place since 2010. It covers your principal (the money you put in) plus interest that has been earned and posted to the account before the bank fails. The protection is automatic — you do not need to sign up, pay a fee, or do anything to activate it.

Not all banks are FDIC-insured. Most traditional banks and many online banks are members, but you can verify your bank's status on the FDIC's website by searching for the institution by name. Credit unions use a similar system called the National Credit Union Administration (NCUA), which also protects up to $250,000 per account.

Key Takeaways

  • The FDIC protects up to $250,000 per depositor per bank, and this limit applies separately to each bank where you have an account.
  • Money in a savings account is covered automatically — you do not need to register or take any action for protection to apply.
  • Different account categories at the same bank are insured separately, so a joint account and an individual account are each covered up to $250,000.
  • If you have more than $250,000 at one bank, only the first $250,000 is protected, and the rest is at risk if the bank fails.
  • You can verify whether your bank is FDIC-insured by searching the FDIC's Bank Find tool on their website.

How the $250,000 limit works across multiple accounts

The FDIC counts each account category separately, even if they are all at the same bank. An individual savings account, a joint savings account, and a savings account held in trust for a beneficiary are three separate categories. Each one is insured up to $250,000. If you have $200,000 in your individual account and $200,000 in a joint account at the same bank, both amounts are fully protected.

However, if you have multiple individual accounts at the same bank — say, one savings account and one money market account — they are combined for insurance purposes. The FDIC adds them together and protects only up to $250,000 total across both. If you have $150,000 in savings and $150,000 in a money market account at the same bank, only $250,000 is covered, and $50,000 is uninsured.

The way to protect more than $250,000 is to spread it across different banks. If you have $300,000, you could put $250,000 at Bank A and $50,000 at Bank B. Both amounts would be fully protected because each bank's coverage is separate. Some people use this strategy specifically to keep large amounts safe.

What happens if a bank fails

When an FDIC-insured bank fails, the agency steps in and either arranges for another bank to take over the failed bank's accounts or pays depositors directly. In most cases, you regain access to your money within a few business days. The FDIC does not wait for a long investigation — the protection is meant to be fast.

You will receive notice from the FDIC or the acquiring bank about what happened and how to access your funds. If your account balance is under $250,000, you will receive the full amount. If it is over $250,000, you will receive $250,000, and the rest becomes part of the bank's assets that creditors may claim.

Bank failures are rare in the United States. The FDIC has been in place since 1933, and the insurance system has handled hundreds of failures without depleting its reserve fund. The last significant wave of bank failures occurred during the 2008 financial crisis, but even then, depositors with balances under $250,000 lost no money.

Account types that are covered and not covered

Savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs) are all covered by FDIC insurance. The type of account does not matter — the $250,000 limit applies to all of them. Interest earned on the account before the bank fails is also protected as part of the total.

Some account types are not covered. Stocks, bonds, mutual funds, and brokerage accounts held at a bank are not FDIC-insured because they are securities, not deposits. Safe deposit boxes and their contents are also not covered. If you keep valuables or documents in a safe deposit box at a bank, that box is not protected by the FDIC if the bank fails.

Retirement accounts like IRAs and 401(k)s held at a bank have their own separate FDIC coverage category. An IRA at a bank is insured up to $250,000 separately from your regular savings account, so you can have $250,000 in a savings account and $250,000 in an IRA at the same bank, and both are fully protected.

Joint accounts and trust accounts have separate coverage

If you have a joint savings account with another person, the FDIC insures it up to $250,000 per owner. If you and your spouse have a joint account with $300,000, the FDIC covers $150,000 for you and $150,000 for your spouse, for a total of $300,000 protected. This is different from an individual account, where only $250,000 total is covered.

Accounts held in trust for a beneficiary also receive separate coverage. If you set up a savings account in trust for your child, that account is insured up to $250,000 separately from your individual account. You can have $250,000 in your own name and $250,000 in a trust account for each of your children, and all of it is protected at the same bank.

The key is that the FDIC looks at the ownership structure. The same bank can hold multiple accounts under different ownership categories, and each category gets its own $250,000 limit. This is why some people with large amounts of money use joint accounts or trust accounts as a way to increase their coverage at a single bank.

What is not protected and what you should know

Deposits at banks that are not FDIC-insured are not protected. Before opening an account, check whether the bank is a member of the FDIC. Most traditional banks are, but some smaller institutions or foreign banks operating in the United States may not be. The FDIC's Bank Find tool lets you search by bank name or location to confirm membership.

Money in accounts at non-bank financial institutions — such as investment firms, insurance companies, or money services businesses — is not covered by FDIC insurance. If you keep money with a brokerage or investment company, that money is not protected the same way. Some of these institutions have their own insurance through the Securities Investor Protection Corporation (SIPC), which covers different types of accounts and has different limits.

The FDIC does not cover losses from fraud, theft, or poor investment decisions. If someone steals your debit card and drains your account, the FDIC does not reimburse you — that is a separate issue handled by your bank's fraud protection policies. If you invest in a stock through your bank and the stock loses value, that loss is not covered by FDIC insurance.

How to verify your bank is FDIC-insured

Visit the FDIC's official website and use the Bank Find tool. Enter your bank's name, city, or state, and the tool will show you whether it is insured, what its insurance coverage limits are, and when it was last examined. You can also call the FDIC directly at 1-877-ASK-FDIC (1-877-275-3342) to ask about a specific bank.

If your bank is FDIC-insured, you will usually see the FDIC logo displayed in the bank's lobby or on its website. However, the presence of the logo is not a may provide — always verify using the Bank Find tool to be certain. Some banks display the logo incorrectly or use outdated information.

If you discover that your bank is not FDIC-insured, you should consider moving your money to an insured bank. Uninsured deposits carry real risk. If the bank fails, you become an unsecured creditor and may recover only a small portion of your money, if anything, after the bank's assets are liquidated.

Frequently Asked Questions

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

Only $250,000 is protected by the FDIC. The remaining $250,000 is uninsured and at risk if the bank fails. To protect the full amount, you would need to split it between two different banks, with $250,000 at each one.

Does FDIC insurance cover money I lose to fraud or theft?

No. FDIC insurance protects against bank failure only. If your account is hacked or your debit card is stolen, that is a fraud issue handled by your bank's fraud protection policy, not by the FDIC. Report fraud to your bank immediately.

Are online banks FDIC-insured?

Most online banks are FDIC-insured, but not all. Check the bank's website or use the FDIC's Bank Find tool to confirm. Many online banks actually offer higher interest rates precisely because they have lower overhead costs, and they maintain full FDIC insurance.

If I have a savings account and a checking account at the same bank, are they both covered?

Both accounts are combined for FDIC purposes and covered up to $250,000 total. If you have $150,000 in savings and $150,000 in checking at the same bank, the full $300,000 is protected. If you have $200,000 in each, only $250,000 total is covered.

What happens to my money if the bank fails while I am away?

The FDIC takes over and either transfers your account to another bank or pays you directly. You will receive notice by mail or email. The process usually takes a few business days, and you will have access to your insured funds. You do not need to do anything — the FDIC handles it automatically.