Money market accounts are FDIC insured up to $250,000 per depositor, per bank, in the same ownership category

A money market account at a bank or credit union gets the same FDIC protection as a regular savings account. The Federal Deposit Insurance Corporation covers up to $250,000 of your money if the bank fails. That limit applies to each depositor at each institution — so if you have $250,000 in a money market account at Bank A and another $250,000 at Bank B, both are fully covered.

The catch is the ownership category. Money you hold alone is covered separately from money you hold jointly with someone else. If you and your spouse each own $250,000 in separate money market accounts at the same bank, you are both covered. If you own a joint money market account with $250,000, that $250,000 is the limit for both of you combined in that category at that bank.

Money market accounts at credit unions follow the same rule but under the National Credit Union Administration (NCUA) instead of the FDIC. The coverage limit is identical: $250,000 per member per credit union per ownership category.

Key Takeaways

  • Money market accounts held at banks are FDIC insured up to $250,000 per person per bank, the same as savings accounts.
  • The $250,000 limit covers each ownership category separately — individual accounts, joint accounts, and trust accounts do not share the same limit.
  • Money market accounts at credit unions are covered by the NCUA, not the FDIC, but the $250,000 per-member limit works the same way.
  • If you have more than $250,000 to protect at one bank, you can open accounts in different ownership categories or spread money across multiple banks.

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

The FDIC does not count money market accounts separately from other deposit accounts. If you have a money market account and a savings account at the same bank, both in your name alone, they share the same $250,000 limit. The FDIC adds them together. If your money market account holds $180,000 and your savings account holds $100,000, only $250,000 is covered — the extra $30,000 is not.

Accounts in different ownership categories at the same bank are covered separately. A money market account in your name alone, a joint money market account with your spouse, and a money market account held in trust for your child each get their own $250,000 limit at that bank. This is the main way to protect more than $250,000 at a single institution.

Retirement accounts — IRAs, SEP-IRAs, and similar accounts — have their own $250,000 limit separate from regular deposits. If you have a money market IRA and a money market savings account at the same bank, they do not share the limit.

What happens if a bank fails and your money market account exceeds $250,000

If your bank closes, the FDIC steps in and pays depositors from the insurance fund. You receive the covered amount — up to $250,000 — within a few business days, usually by direct deposit to the account you registered with the bank. Money above $250,000 becomes a claim against the bank's remaining assets, which often means you recover little or nothing.

Bank failures are rare. The FDIC has insured deposits since 1933, and the last significant wave of failures ended in the early 1990s. Still, the insurance exists because the risk is real. Large banks are considered less likely to fail than small regional banks, but size is not a may provide.

The FDIC publishes a list of banks it has taken over. You can search for your bank's name on the FDIC website to see its history. If a bank you use has failed in the past, that failure is public record, but it does not mean the current bank under that name will fail — ownership and management change after a takeover.

Spreading money across multiple banks to stay fully covered

If you have more than $250,000 and want full FDIC coverage, the simplest method is to open accounts at different banks. A money market account at Bank A and a money market account at Bank B are each covered up to $250,000. You can do this with as many banks as you need.

Online banks and brick-and-mortar banks are treated as separate institutions for FDIC purposes. A money market account at a large national bank and a money market account at an online bank are covered separately. The FDIC does not care whether the bank has physical branches — only whether it holds a separate charter.

Some banks are owned by the same parent company but hold separate charters. The FDIC covers each charter separately. Before opening accounts at two banks you think are different, check the FDIC's Bank Find tool to confirm they have separate charter numbers. If they share a charter, deposits at both are combined under one $250,000 limit.

Money market accounts versus money market funds: the insurance difference

A money market account at a bank is FDIC insured. A money market fund sold by a brokerage or investment company is not. This is a critical distinction that confuses many people because the names are similar.

Money market funds are investments in short-term debt securities — essentially IOUs from governments and corporations. They are not bank deposits. The Securities and Exchange Commission (SEC) regulates them, not the FDIC. If the fund company fails, your money is not protected by deposit insurance. Money market funds can lose value, though losses are rare because they invest in very short-term, low-risk debt.

If you want FDIC protection, you need a money market account at a bank or credit union, not a money market fund at a brokerage. The account will have a lower interest rate than a money market fund in most environments, but you trade yield for safety.

NCUA coverage for money market accounts at credit unions

Credit unions use the National Credit Union Administration for deposit insurance instead of the FDIC. The coverage rules are nearly identical: $250,000 per member per credit union per ownership category. A money market account at a credit union is covered the same way as a money market account at a bank.

Credit unions are organized differently from banks — they are member-owned cooperatives rather than shareholder-owned corporations — but deposit insurance works the same way. If you have money at multiple credit unions, each one's deposits are covered separately up to $250,000.

Some credit unions belong to a network that allows you to move money between institutions instantly. This does not change insurance coverage. Each credit union in the network is still a separate institution for NCUA purposes.

Frequently Asked Questions

If I have $300,000 in a money market account, how much is covered?

$250,000 is covered by FDIC insurance. The remaining $50,000 is not protected. If the bank fails, you would recover the $250,000 and become an unsecured creditor for the $50,000, which often means recovering little or nothing. To protect all $300,000, open a money market account at a second bank and split the money between them.

Are money market accounts at online banks FDIC insured?

Yes, as long as the online bank holds an FDIC charter. Most major online banks are FDIC insured. You can verify this by searching the bank's name in the FDIC's Bank Find tool on the FDIC website. The tool shows the bank's charter number and insurance status.

What if I have a joint money market account with my spouse — is the limit $250,000 or $500,000?

The limit is $250,000 total for the joint account. Both of you combined are covered up to $250,000 in that ownership category. If you each want $250,000 covered, you would need separate individual accounts at the same bank, which would give you $500,000 of coverage combined.

Do I need to register my money market account for FDIC coverage?

No. FDIC coverage is automatic for all deposits at insured banks. You do not need to do anything. The bank is required to maintain FDIC insurance, and coverage applies whether you know about it or not. You can verify your bank's insurance status on the FDIC website.

Can I lose money in a money market account if the bank fails?

Only the amount above $250,000. The FDIC covers up to $250,000 per depositor per bank per ownership category. Amounts above that become claims against the bank's remaining assets, which often recover little. The account itself does not lose value — the bank's failure determines whether you recover your full deposit.