Your money is protected up to $250,000 per account at banks insured by the FDIC, even if the bank fails
The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks. If your bank closes or runs out of money, the FDIC pays you back up to $250,000 per depositor, per bank, per account category. This protection is automatic — you do not have to sign up for it or pay a fee. Most banks display the FDIC logo on their website or in their branch.
The $250,000 limit applies to each separate account you hold at the same bank. A checking account and a savings account at the same bank are covered separately, so you could have $250,000 in each and both would be fully protected. Joint accounts are also covered separately — if you and your spouse each own half of a joint savings account, you each have $250,000 of coverage, for $500,000 total at that bank.
Credit unions use a similar system called NCUA insurance, which also covers up to $250,000 per account. If you bank at a credit union, check whether it displays the NCUA logo or ask a teller directly.
Key Takeaways
- FDIC insurance covers up to $250,000 per depositor, per bank, per account type, and it is automatic at all member banks.
- A checking account and savings account at the same bank are insured separately, so you can have $500,000 total coverage at one bank if you split your money between them.
- Joint accounts receive their own $250,000 coverage limit, separate from individual accounts at the same bank.
- Money in savings accounts is not at risk from normal market changes because savings accounts do not invest your money — they hold it in cash.
- If you have more than $250,000 at one bank, you can open accounts at different FDIC-insured banks to protect the excess.
How FDIC insurance works when a bank fails
Bank failures are rare in the United States. When one does happen, the FDIC steps in and either arranges for another bank to take over the failed bank's accounts, or it pays depositors directly. In most cases, you regain access to your money within a few business days — either through the new bank or through an FDIC check.
The FDIC has a fund built from fees paid by member banks. This fund has never run out of money. Since 1934, when FDIC insurance began, no depositor has lost a single dollar of insured funds because of a bank failure.
What FDIC insurance does not cover
FDIC insurance protects your cash balance, but it does not cover investments. If your bank sells you stocks, bonds, mutual funds, or brokerage products, those are not insured by the FDIC — they are protected by different rules through the Securities Investor Protection Corporation (SIPC) or not at all, depending on the product.
FDIC insurance also does not cover safe deposit boxes, cashier's checks, or money orders. If you keep jewelry or documents in a safe deposit box at the bank and the bank fails, the FDIC does not reimburse you for the contents. Safe deposit boxes are your responsibility to insure separately, usually through a homeowner's or renter's insurance policy.
Fraud and theft are also outside FDIC coverage. If someone steals your debit card and drains your account, the FDIC does not reimburse you — but your bank's fraud protection rules and federal law (Regulation E) may. Report unauthorized transactions to your bank immediately, usually within 60 days, to invoke those protections.
Protecting money over $250,000 at one bank
If you have more than $250,000 in cash savings, you can spread it across multiple FDIC-insured banks to keep all of it protected. Each bank provides a separate $250,000 limit, so $250,000 at Bank A and $250,000 at Bank B means you have $500,000 in total coverage.
You can also use different account categories at the same bank to increase coverage. For example, an individual savings account, a joint savings account with your spouse, and a savings account held in trust for your child would each receive $250,000 of coverage at the same bank — that is $750,000 total. The FDIC website has a tool called the FDIC Coverage Calculator that shows you exactly how much of your money is insured based on how you structure your accounts.
Some people use online banks specifically because they can open accounts at multiple online banks (which are FDIC-insured) and keep all their money in savings accounts earning interest, with full coverage. Online banks often offer higher interest rates than brick-and-mortar banks, so this strategy can both protect your money and earn you more.
Why your savings account balance does not drop on its own
A savings account holds cash, not investments. Your balance does not go up and down with the stock market or interest rates — it only changes when you deposit money, withdraw money, or earn interest. The bank pays you a small amount of interest (the rate varies by bank and changes over time) in exchange for holding your money.
This is different from a brokerage account or investment account, where your balance can drop if the value of the stocks or funds you own falls. In a savings account, you own the cash itself, not a share of something else. The only risk to your balance is if the bank fails (covered by FDIC insurance) or if you lose access to your account (which happens if you forget your password or if fraud occurs).
Checking your bank's FDIC status
Before you open an account or move money to a new bank, confirm that the bank is FDIC-insured. Most banks are, but not all. Credit unions are NCUA-insured instead, which works the same way.
You can search the FDIC's Bank Find tool on the FDIC website by entering the bank's name and state. The tool shows you whether the bank is insured, which branches are covered, and what the coverage limits are. If a bank does not appear in the search, it is not FDIC-insured, and your deposits there are not protected by federal insurance.
Your bank statement or online banking portal may also display the FDIC logo or a statement saying your account is FDIC-insured. If you do not see it, ask a teller or call the bank's customer service line.
What happens if you lose access to your account
If you forget your online banking password, you can reset it through the bank's website or by calling customer service. If your debit card is lost or stolen, call your bank immediately to freeze it — most banks can issue a replacement card within 5 to 10 business days.
If your account is frozen because of suspected fraud or a legal hold, the bank must notify you and explain why. You have the right to dispute the freeze and ask the bank to release your money. Contact the bank's customer service or compliance department in writing if a phone call does not resolve it.
If the bank closes your account without warning, federal law requires the bank to give you notice and time to withdraw your money. If you cannot access your account and the bank will not respond, contact your state's banking regulator or the FDIC's consumer complaint line.
Frequently Asked Questions
What if I have $300,000 at one bank — how much is covered?
Only $250,000 is covered by FDIC insurance. The remaining $50,000 is not protected. To protect all $300,000, move $50,000 to a different FDIC-insured bank, or open a joint account at the same bank with your spouse (which gives you a separate $250,000 limit).
Does FDIC insurance cover money I lose to a scam?
No. FDIC insurance only covers bank failure, not fraud or theft. However, if someone uses your debit card without permission, federal law (Regulation E) limits your liability to $50 if you report it within 2 business days, or $500 if you report it within 60 days. Report fraud to your bank immediately.
Are online banks as safe as brick-and-mortar banks?
Yes, as long as they are FDIC-insured. Online banks are required to carry the same FDIC insurance as traditional banks. Search the FDIC Bank Find tool to confirm the online bank is insured before you open an account.
If my bank fails, how long before I get my money back?
In most cases, you regain access to your money within one to three business days. The FDIC either arranges for another bank to take over the failed bank's accounts, or it mails you a check. Since 1934, the average time has been less than one week.
Does FDIC insurance cover my money if I keep it under my mattress?
No. FDIC insurance only covers money held in accounts at FDIC-insured banks. Cash kept at home is not insured by any federal program. If it is lost, stolen, or destroyed, you have no protection.