FDIC insurance covers up to $250,000 per depositor, per bank, per account ownership category

The Federal Deposit Insurance Corporation (FDIC) protects your money if a bank fails. The standard coverage limit is $250,000 for each depositor at each bank. This means if you have $250,000 or less in a savings account at one bank, all of it is covered. If you have $300,000 at that same bank, only $250,000 is protected — the extra $50,000 is not.

The $250,000 limit applies per account ownership category, not per account. A savings account, a checking account, and a money market account at the same bank all count toward the same $250,000 limit if they are all in your name alone. However, if you have a joint account with someone else at that same bank, that joint account has its own separate $250,000 limit.

FDIC insurance is automatic. You do not need to sign up, pay a fee, or do anything to activate it. If your bank fails, the FDIC steps in and pays depositors directly, usually within a few business days.

Key Takeaways

  • The FDIC covers up to $250,000 per person per bank per account ownership type, and this limit has been in place since 2010.
  • A joint account with another person has its own separate $250,000 coverage limit, so two people can each have $250,000 protected in the same joint account.
  • Savings accounts, checking accounts, and money market accounts at the same bank all share the same $250,000 limit if they are in your name alone.
  • Retirement accounts like IRAs have their own separate $250,000 coverage limit at each bank, even if you also have regular savings accounts there.
  • If you have more than $250,000 to protect, you can spread money across multiple banks or use different account ownership categories to increase your total coverage.

How the $250,000 limit breaks down by account type

The FDIC groups accounts into ownership categories. Each category has its own $250,000 limit at each bank. This means you can have more than $250,000 protected at a single bank if you use different categories.

An account in your name alone is one category. A joint account with another person is a separate category — the FDIC insures it up to $250,000 total, and both owners are covered equally. If you and a spouse have a joint savings account with $250,000, you are both fully protected. If you each also have individual accounts at the same bank, those individual accounts have their own separate $250,000 coverage.

Retirement accounts — IRAs, SEP IRAs, and similar accounts — are a separate category with their own $250,000 limit per bank. A revocable trust account is another category. Accounts held in the name of a business are yet another. The FDIC website has a full list of all categories, but the most common ones for personal savers are individual, joint, and retirement accounts.

What happens if you have more than $250,000 at one bank

Money over $250,000 at a single bank is not protected by FDIC insurance. If the bank fails, you lose the excess. The simplest way to protect more money is to split it across multiple banks. You can have $250,000 at Bank A and $250,000 at Bank B, and both amounts are fully covered.

Online banks and brick-and-mortar banks are separate institutions for FDIC purposes. If you have $250,000 at Chase and $250,000 at an online bank like Ally, both are protected. However, if Chase owns multiple brands or subsidiaries, they may be treated as one bank for FDIC purposes — you need to check with the bank or use the FDIC's BankFind tool to confirm.

Another option is to use different account ownership categories at the same bank. If you have a spouse, you could have $250,000 in an individual account and $250,000 in a joint account at the same bank, for a total of $500,000 protected. A revocable trust account would add another $250,000 of coverage. However, this strategy works only if you actually own the accounts in those different categories — you cannot simply name someone else as owner to create a separate category.

How to check if your bank is FDIC-insured

Not all banks are FDIC-insured. Credit unions use a different system called NCUA insurance, which works similarly but is run by a different agency. Most traditional banks are FDIC-insured, but you can verify by visiting the FDIC's BankFind tool at ibanking-services.fdicconnect.org. Type in your bank's name and it will show whether it is insured and what the current coverage limits are.

Your bank statement or online banking portal may also display FDIC insurance information. Many banks print a notice on statements saying "deposits are FDIC-insured" or provide a link to coverage details. If you cannot find this information, call your bank's customer service line and ask directly.

What FDIC insurance does and does not cover

FDIC insurance covers money deposited in savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs). It covers the principal amount and any interest that has been earned and added to the account. It does not cover investment losses, fees, or penalties.

FDIC insurance does not cover stocks, bonds, mutual funds, or other investments held at a bank's brokerage subsidiary. If your bank offers investment services, money in those accounts is not FDIC-insured — it is covered by different protections like SIPC (Securities Investor Protection Corporation) instead. Safe deposit boxes are also not covered by FDIC insurance.

The insurance covers the account balance as of the date the bank fails, not the balance at the time you opened the account. If you had $100,000 in a savings account and it grew to $150,000 by the time the bank failed, the full $150,000 is covered (as long as it is under $250,000).

The history of the $250,000 limit

The FDIC was created in 1933 after the banking crisis of the Great Depression. The original insurance limit was $2,500 per account. Over the decades, Congress raised the limit several times as the economy grew and inflation increased the value of savings.

In 2008, during the financial crisis, Congress temporarily raised the limit to $250,000 per account. In 2010, this temporary increase became permanent. The $250,000 limit has remained unchanged since then, even though inflation has continued. This means the real purchasing power of FDIC coverage has declined slightly over time, but $250,000 remains the official limit.

Frequently Asked Questions

If I have $300,000 in a savings account, how much is protected?

Only $250,000 is covered by FDIC insurance. The remaining $50,000 is not protected. To protect the full $300,000, you would need to move $50,000 to a different bank or into a different account ownership category at the same bank, such as a joint account or a retirement account.

Does FDIC insurance cover money in a joint account differently?

Yes. A joint account has its own separate $250,000 coverage limit. If you and another person have a joint savings account with $250,000, both of you are fully protected. Each owner is insured up to $250,000 in the joint account, separate from any individual accounts they may have at the same bank.

Are online banks FDIC-insured?

Most online banks are FDIC-insured, but not all. Check the bank's website or use the FDIC's BankFind tool to confirm. If a bank is FDIC-insured, the coverage limits are the same as at traditional banks — $250,000 per depositor per bank per account ownership category.

What happens to my money if the bank fails?

The FDIC takes over and pays depositors directly. You typically receive your money within a few business days, either by check or electronic transfer to another account. You do not need to do anything — the FDIC handles the process automatically for all insured deposits.

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

No. Naming a beneficiary on a payable-on-death (POD) account does create a separate coverage category for that beneficiary, but it does not increase your own coverage. The account itself is still insured up to $250,000 total, divided among all beneficiaries named on it.