Not all banks are FDIC insured, and the ones that aren't leave your deposits unprotected

The Federal Deposit Insurance Corporation (FDIC) only insures banks that are members of the FDIC system. Most traditional banks are members, but some are not — and credit unions, brokerage firms, and money market funds operate under different insurance systems entirely. If your bank fails and it is not FDIC insured, you lose whatever money you have on deposit there. There is no backup protection and no way to recover it afterward.

You can find out whether your specific bank is FDIC insured in under a minute using the FDIC's Bank Find tool on their website. You enter your bank's name and your state, and it tells you whether that institution is insured and what coverage limits apply to your accounts there.

Key Takeaways

  • Most banks with "Bank" in their name are FDIC insured, but some are not, and the only way to know for certain is to check the FDIC Bank Find tool.
  • Credit unions are insured by the NCUA (National Credit Union Administration), not the FDIC, and coverage limits and rules differ slightly.
  • Online banks, savings banks, and trust companies may or may not be FDIC insured depending on their charter — you must verify each one.
  • If a bank is not FDIC insured and it fails, your deposits are not protected and you will not recover the money.
  • FDIC coverage protects up to $250,000 per depositor per bank, but only for deposits — not for investments like stocks or mutual funds held at that bank.

How to check whether your bank is FDIC insured

Go to the FDIC's Bank Find tool at banks.data.fdic.gov. Type in your bank's name and select your state. The tool will show you the bank's official name, the date it joined the FDIC (if it is a member), and its FDIC certificate number.

If your bank appears in the results with an active FDIC certificate number, it is insured. If it does not appear at all, or if the result shows "No" under FDIC insurance, your deposits there are not covered. Some banks use a shortened or informal name — for example, "Chase" instead of "JPMorgan Chase Bank, N.A." — so if your first search does not return results, try the bank's legal name, which appears on your account statements or the bank's website.

You can also call your bank directly and ask whether it is FDIC insured. Most will tell you immediately. If they hesitate or give a vague answer, that is a warning sign.

Types of banks that are often not FDIC insured

Credit unions are insured by the NCUA, not the FDIC. Coverage is similar — up to $250,000 per account holder per credit union — but the rules and claim process are slightly different. If you bank at a credit union, your money is still protected, just through a different system.

Brokerage firms and investment banks are not FDIC insured at all. If you hold stocks, bonds, mutual funds, or other securities at a brokerage, those are covered by SIPC (Securities Investor Protection Corporation) insurance, which protects up to $500,000 per account but only for securities, not cash. Cash held at a brokerage may have no protection unless the brokerage is also a bank and holds that cash in an FDIC-insured deposit account.

Money market funds are not FDIC insured. They are mutual funds, not bank deposits, and they carry market risk. The value of your shares can go down.

Some online banks and neobanks are FDIC insured and some are not. Chime, for example, is not a bank — it is a financial technology company — and deposits held through Chime are placed at partner banks that are FDIC insured. But you have to verify this for each company. Read the fine print or call and ask directly.

What FDIC insurance actually covers and what it does not

FDIC insurance covers money you have deposited in a bank account — checking, savings, money market deposit accounts, and CDs. It does not cover investments. If you buy stocks, bonds, or mutual funds through your bank's brokerage service, those are not FDIC insured, even though you bought them at your bank.

Coverage is $250,000 per depositor per bank. If you have $300,000 at one FDIC-insured bank, only $250,000 is protected. The extra $50,000 is at risk if the bank fails. If you have $250,000 at Bank A and $250,000 at Bank B, both are fully covered because the insurance is per bank, not per person.

Joint accounts are covered separately. If you and your spouse each own half of a joint account with $500,000 in it, the FDIC treats it as $250,000 per person, so the full amount is covered. Retirement accounts (IRAs, SEP-IRAs, and others) are also covered separately from regular deposits, up to $250,000 each.

What happens if an FDIC-insured bank fails

If your bank fails and it is FDIC insured, the FDIC steps in and either arranges for another bank to take over the failed bank's deposits, or it pays you directly. In most cases, you will see your money transferred to a new bank within a few business days. You do not have to do anything — the FDIC handles it.

If your bank is not FDIC insured and it fails, there is no safety net. You will lose whatever money you have on deposit. You may be able to file a claim against the bank's assets in bankruptcy court, but you will be far back in line behind secured creditors, and you will likely recover little or nothing.

Banks that are FDIC insured but have limits you should know about

Large national banks like Bank of America, Wells Fargo, Chase, and Citibank are all FDIC insured. So are most regional and community banks. But size does not may provide safety — what matters is FDIC membership. A small local bank can be FDIC insured, and a large online bank might not be.

If you have more than $250,000 to deposit at a single bank, you can spread it across multiple account types to stay within coverage limits. For example, put $250,000 in a regular savings account, $250,000 in a CD, and $250,000 in a joint account with your spouse. Each is covered separately up to $250,000. This strategy is called deposit laddering or tiering, and it is a common way to protect large sums at a single FDIC-insured bank.

Why some banks choose not to be FDIC insured

Most banks are FDIC insured because it builds customer trust and is required by law for banks that accept deposits from the public. But a few banks — usually very small ones, private banks, or banks that serve only wealthy clients — choose not to join. They may argue that FDIC insurance is unnecessary because their customers are sophisticated investors or because the bank's capital is so strong that failure is unlikely.

This is a red flag. If a bank is not FDIC insured, there is no reason to bank there unless you have a very specific reason and you understand the risk. Even banks that seem stable can fail without warning. The FDIC insurance system exists because bank failures happen.

Frequently Asked Questions

If I have money at two different branches of the same bank, is each branch covered separately?

No. FDIC coverage is per bank, not per branch. If you have $150,000 at one branch and $150,000 at another branch of the same bank, the FDIC treats it as $300,000 at one institution. Only $250,000 is covered. Branches are part of the same legal entity.

Are online banks FDIC insured?

Some are and some are not. Online banks like Ally, Marcus, and Discover are FDIC insured. Others, like Chime and Square Cash, are not banks themselves — they are technology companies that partner with FDIC-insured banks to hold your money. Check the Bank Find tool or the company's website to confirm.

What if my bank says it is insured but the FDIC Bank Find tool does not show it?

Trust the FDIC Bank Find tool. It is the official record. If a bank does not appear there or appears without an active FDIC certificate, it is not FDIC insured, regardless of what the bank claims. Contact the FDIC directly if you believe there is an error.

Does FDIC insurance cover money I owe the bank, like overdraft fees?

No. FDIC insurance covers deposits only. If you owe the bank money — overdraft fees, loan balances, or other debts — those are separate from your deposit account and are not covered by FDIC insurance.

If I move my money to a different bank, does my FDIC coverage move with it?

No. Coverage is tied to the bank where you hold the account. If you move your money to a different FDIC-insured bank, that new bank's FDIC coverage applies. If you move it to a non-FDIC-insured institution, you lose coverage.