What FDIC insurance covers in a traditional savings account

A traditional savings account at an FDIC-insured bank is protected up to $250,000 per depositor, per bank, per ownership category. That means if your bank fails, the Federal Deposit Insurance Corporation will return your money up to that limit. The protection is automatic — you do not need to sign up, pay a fee, or do anything special. If you have $50,000 in a savings account and the bank closes, you get your $50,000 back.

The $250,000 limit applies to each separate ownership category at the same bank. A savings account in your name alone is one category. A joint account with your spouse is a different category, also covered up to $250,000. A savings account you hold in trust for your child is yet another category. If you have all three at the same FDIC-insured bank, each is covered separately up to $250,000.

FDIC insurance does not cover investment accounts, money market mutual funds, stocks, bonds, or cryptocurrency. It covers only deposit accounts — savings accounts, checking accounts, money market deposit accounts, and certificates of deposit (CDs). The account must be at a bank that displays the FDIC logo or is listed on the FDIC's official bank search tool.

Key Takeaways

  • FDIC insurance protects up to $250,000 per person per bank in a traditional savings account, and the coverage is automatic with no action required from you.
  • Each ownership category at the same bank — individual, joint, trust — is insured separately, so you can have multiple accounts over $250,000 total and still be fully covered.
  • The protection covers only deposit accounts like savings and checking, not investments, mutual funds, or stocks held at the same institution.
  • You can verify your bank is FDIC-insured by looking for the FDIC logo on statements or by searching the FDIC's official bank database.

How the FDIC pays you back if a bank fails

When an FDIC-insured bank closes, the FDIC takes over and begins paying depositors. In most cases, you receive your money within one to three business days. The FDIC transfers funds directly to the account you had at the failed bank, or if that is not possible, it mails a check to your address on file.

You do not need to file a claim or contact the FDIC unless your account balance exceeds $250,000 and you believe part of your money should be covered under a different ownership category. The FDIC handles the process automatically for accounts within the insurance limit. Bank failures are rare — the last significant wave occurred during the 2008 financial crisis — but when they happen, FDIC protection has consistently returned depositors' money.

Ownership categories that change your coverage

The FDIC recognizes several ownership categories, and each one is insured separately at the same bank. Understanding which category your account falls into helps you know whether you are fully covered.

An account in your name alone is covered up to $250,000. A joint account with another person is covered up to $250,000 total, with each owner's share insured separately if the account is held as "tenants in common" rather than "joint tenants with rights of survivorship" — check your account paperwork to see which applies. A savings account held in trust for a beneficiary (such as a parent holding money in trust for a child) is a separate category, also covered up to $250,000. Retirement accounts like IRAs held at the bank are covered up to $250,000 as a separate category from your other accounts.

If you have $200,000 in a savings account in your name and $200,000 in a joint savings account with your spouse at the same FDIC-insured bank, both accounts are fully covered because they are different ownership categories. If you have $300,000 in a single account in your name alone, only $250,000 is covered, and you lose $50,000 if the bank fails.

What is not covered by FDIC insurance

FDIC insurance protects only money held in deposit accounts. If you buy stocks, bonds, mutual funds, or exchange-traded funds (ETFs) through a bank's brokerage service, those investments are not covered by FDIC insurance, even if the bank fails. The bank may hold them in a separate brokerage account, which may have its own protection through the Securities Investor Protection Corporation (SIPC), but that is a different insurance system with different limits.

Safe deposit boxes are also not covered. If you store jewelry, documents, or cash in a safe deposit box at an FDIC-insured bank and the bank fails, the FDIC does not insure the contents. Safe deposit boxes are the bank's responsibility, and if the bank closes, you may lose access or face delays in retrieving your items.

Cashier's checks, money orders, and traveler's checks issued by the bank are not covered by FDIC insurance. Neither are U.S. Treasury securities, even if purchased through the bank. If you want to protect money beyond $250,000, you can open accounts at multiple FDIC-insured banks — each bank's accounts are insured separately.

How to verify your bank is FDIC-insured

Before you open a savings account, confirm the bank is FDIC-insured. Most traditional banks are, but some online banks, credit unions, and alternative financial institutions are not. The easiest way to check is to look for the FDIC logo on the bank's website or on your account statements — it usually appears in the footer or on the login page.

You can also search the FDIC's official Bank Find tool at banks.data.fdic.gov. Type in the bank's name and your state, and the tool will show you whether it is FDIC-insured, which branches are covered, and the insurance limits for different account types. If a bank does not appear in the search results, it is not FDIC-insured, and your deposits are not protected by the FDIC.

Credit unions are not FDIC-insured; they are insured by the National Credit Union Administration (NCUA), which offers similar coverage up to $250,000. If you bank at a credit union, look for the NCUA logo instead and search the NCUA's credit union locator to confirm coverage.

Strategies for protecting money over $250,000

If you have more than $250,000 to keep safe, you have several options. The simplest is to spread your money across multiple FDIC-insured banks. A savings account at Bank A is covered up to $250,000, and a savings account at Bank B is covered up to $250,000 — both are fully insured because they are at different banks. You can open accounts at as many banks as you need to cover your full balance.

You can also use different ownership categories at the same bank. If you have $400,000, you could put $250,000 in an account in your name alone and $150,000 in a joint account with your spouse at the same bank. Both accounts would be fully covered because they are different ownership categories. A trust account is another category, as is an IRA or other retirement account.

Some people use a combination: multiple banks plus multiple ownership categories. There is no limit to how many FDIC-insured banks you can use, and no limit to how many ownership categories you can have at each bank, so you can protect any amount of money this way. The trade-off is managing multiple accounts and keeping track of which bank holds which money.

Frequently Asked Questions

Does FDIC insurance cover my money if I lose my debit card or someone steals from my account?

No. FDIC insurance protects your money only if the bank itself fails. If your debit card is stolen or someone fraudulently transfers money from your account, that is a separate issue handled by the bank's fraud protection and your rights under the Electronic Funds Transfer Act. Contact your bank immediately if you suspect fraud, and the bank is required to investigate and usually return your money within a set timeframe.

If I have $300,000 in a savings account, how much does FDIC insurance cover?

FDIC insurance covers $250,000 of the $300,000. You would lose $50,000 if the bank failed. To protect the full $300,000, you could move $50,000 to a different FDIC-insured bank, or open a joint account with a spouse or family member at the same bank and move $50,000 into that account, since joint accounts are a separate coverage category.

Are online banks FDIC-insured?

Many online banks are FDIC-insured, but not all. Online banks owned by traditional banks (like Bank of America's online division) are covered. Some independent online banks are also FDIC-insured. Always search the FDIC Bank Find tool or look for the FDIC logo before opening an account. If the bank is not in the FDIC database, your money is not protected by FDIC insurance.

What happens to my FDIC coverage if I move money between accounts at the same bank?

Moving money between accounts does not change your coverage. If you have $250,000 in a savings account and move it to a checking account at the same bank, you still have $250,000 covered. The FDIC counts all deposit accounts in the same ownership category together. If you have $150,000 in savings and $100,000 in checking, both in your name at the same bank, your total coverage is $250,000 (the limit), not $250,000 per account.

Does FDIC insurance cover money I earn in interest?

Yes. Interest earned on your savings account is counted as part of your deposit balance for FDIC insurance purposes. If you have $240,000 in a savings account and earn $5,000 in interest, your total balance is $245,000, and all of it is covered up to the $250,000 limit.