Your money is insured up to $250,000 per account owner at banks and credit unions that carry federal insurance

The Federal Deposit Insurance Corporation (FDIC) insures deposits at most banks, and the National Credit Union Administration (NCUA) insures deposits at credit unions. If your bank or credit union fails, these agencies pay you back up to $250,000 per depositor, per institution. This is automatic — you do not need to sign up or pay a fee.

The $250,000 limit applies per account owner at each bank. If you have $300,000 in one savings account at Bank A, the FDIC covers $250,000 and you lose $50,000. If you have $200,000 at Bank A and $200,000 at Bank B, both are fully covered because they are at different institutions.

Not every bank or credit union carries this insurance. Before you open an account, check the FDIC or NCUA website to confirm the institution is insured. The bank or credit union is required to display the FDIC or NCUA logo and insurance information in the lobby and on statements.

Key Takeaways

  • The FDIC and NCUA insure deposits up to $250,000 per depositor per institution, and this protection is automatic at insured banks and credit unions.
  • Money in a savings account at an insured bank is protected even if the bank fails and closes.
  • If you have more than $250,000, you can spread it across multiple banks to keep all of it insured.
  • You should verify your bank or credit union is FDIC or NCUA insured before opening an account, using the official lookup tool on their websites.

How the $250,000 limit works across different account types

The $250,000 limit is per depositor per institution, but the FDIC counts different account types separately. A savings account and a checking account at the same bank are insured as two separate accounts, so you could have $250,000 in savings and $250,000 in checking at the same bank and both would be covered.

A joint account — one owned by two people — is also counted separately. If you and your spouse have a joint savings account with $400,000 at Bank A, the FDIC covers $250,000 of it. If each of you also has an individual savings account at Bank A with $200,000, each individual account is covered in full because they are separate account types.

Retirement accounts like IRAs are insured separately too. You could have $250,000 in a regular savings account and $250,000 in an IRA at the same bank, and both would be fully covered. Money market accounts and certificates of deposit (CDs) are also counted separately from savings accounts.

What happens if your bank fails

Bank failures are rare in the United States. When a bank does fail, the FDIC steps in, takes over the bank's assets, and pays depositors. In most cases, you see your money back within one to three business days — the FDIC transfers your insured balance to another bank or sends you a check.

You do not have to do anything. The FDIC finds you using the contact information on file at the bank. If the bank has your current address and phone number, the FDIC will reach you. If your address has changed since you opened the account, update it with the bank before a failure happens.

If your balance exceeds $250,000, you lose the amount over the limit. The FDIC does not cover uninsured balances, and there is no waiting period or application process — the coverage limit is fixed at $250,000 per category.

Banks and credit unions that do not carry federal insurance

Most banks and credit unions carry FDIC or NCUA insurance, but some do not. Online banks, some private banks, and a small number of credit unions operate without federal insurance. These institutions may be safer than they sound — many are well-capitalized and have strong track records — but your money is not protected if they fail.

Before you move money to any bank or credit union, use the FDIC's BankFind tool or the NCUA's Credit Union Locator tool, both free and available on their websites. Type in the bank or credit union name and the state. If it appears in the search results, it is insured. If it does not appear, it is not.

Some banks advertise high interest rates to attract deposits. High rates are not a sign of danger, but they are a reason to double-check insurance status. An uninsured bank offering 5% interest on savings is riskier than an insured bank offering 4%, because you could lose principal if the bank fails.

How to structure accounts if you have more than $250,000

If you have more than $250,000 to save, you can keep all of it insured by spreading it across multiple banks or by using different account types at the same bank. The simplest approach is to open accounts at two or more FDIC-insured banks and divide your money between them.

You can also use account type separation at a single bank. Put $250,000 in a savings account, $250,000 in a checking account, and $250,000 in a CD — all at the same bank, all fully insured. Add a joint account with a spouse and you can insure another $250,000. Add an IRA and you can insure another $250,000.

Keep a written record of which accounts you have at which banks and the balance in each one. This makes it easy to verify your coverage and to update your information if you move or change your phone number. The FDIC also offers a free tool called the FDIC Coverage Calculator that lets you enter your accounts and see exactly how much is covered.

What is not covered by deposit insurance

Deposit insurance covers money in savings accounts, checking accounts, money market accounts, and CDs. It does not cover stocks, bonds, mutual funds, or brokerage accounts — those are protected by different rules (usually by the Securities Investor Protection Corporation, or SIPC, up to $500,000 per account).

Insurance also does not cover safe deposit boxes or items stored in them. If you keep jewelry, documents, or cash in a safe deposit box at a bank and the bank fails, the contents are not insured by the FDIC. Safe deposit boxes are your responsibility to insure separately, usually through homeowners or renters insurance.

Cashier's checks, money orders, and traveler's checks issued by the bank are also not covered. These are considered the bank's obligations, not deposits. If you buy a cashier's check and the bank fails before you cash it, you may have to go through a claims process rather than receiving automatic coverage.

Interest rates and safety are separate questions

A bank offering a low interest rate is just as safe as one offering a high rate, as long as both are FDIC insured. The interest rate tells you what the bank is willing to pay you for your money. Insurance tells you whether your principal is protected if the bank fails. One has nothing to do with the other.

Some people avoid high-yield savings accounts because they worry the high rate means the bank is risky. That is not how it works. A high-yield savings account at an FDIC-insured bank is just as safe as a regular savings account at the same bank. The difference is only in how much interest you earn.

Before you choose a bank based on interest rate, confirm it is FDIC or NCUA insured. After that, the rate is the only thing that matters for safety purposes. Shop for the best rate you can find at an insured institution.

Frequently Asked Questions

What if I have money at multiple branches of the same bank?

All branches of the same bank are treated as one institution for insurance purposes. If you have $150,000 at one branch and $150,000 at another branch of the same bank, the FDIC covers only $250,000 total, not $250,000 per branch. The branch location does not matter — only the bank name.

Does my money lose value if the bank fails?

No. If your balance is under $250,000, you receive the full amount. The FDIC pays you back exactly what you had on deposit, plus any interest earned up to the date the bank closed. You do not lose value; you only lose money if your balance exceeds the $250,000 limit.

Can I increase my coverage by adding a beneficiary to my account?

Yes. A payable-on-death (POD) account — one where you name a beneficiary — is insured separately from your regular account at the same bank. If you have a $250,000 savings account and a $250,000 POD account at the same bank, both are fully covered. Each beneficiary you name also gets separate coverage.

Are online banks as safe as traditional banks?

Online banks are as safe as traditional banks if they are FDIC insured, which most are. Check the FDIC BankFind tool to confirm. Online banks often offer higher interest rates because they have lower overhead costs, not because they are riskier. The insurance protection is identical.

What should I do if my bank is not FDIC insured?

Move your money to an FDIC-insured bank. There is no reason to keep money at an uninsured bank when insured alternatives are widely available. The transfer usually takes three to five business days. Once the money arrives at the new bank, it is covered by FDIC insurance.