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

The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks up to $250,000 per person per institution. That means if you have $300,000 in a savings account at one bank, the FDIC covers $250,000 and you lose the remaining $50,000 if the bank fails. The limit resets if you move your money to a different bank — a second bank would cover a separate $250,000.

The $250,000 limit applies to each ownership category separately. A single account in your name is one category. A joint account with your spouse is a different category, also covered up to $250,000. A retirement account (IRA) is a third category, covered separately. This means you can have up to $250,000 in each type of account at the same bank and be fully covered.

The coverage applies only to deposits held at banks that are FDIC members. Most banks are members, but not all — credit unions use a different system (the NCUA), and investment accounts at brokerages are not FDIC-insured at all. You can check whether a specific bank is insured on the FDIC's website using their Bank Find tool.

Key Takeaways

  • The FDIC covers $250,000 per person per bank, so splitting money across multiple banks increases your coverage.
  • Joint accounts, retirement accounts, and single accounts are insured separately at the same bank, meaning you can have $250,000 in each category.
  • Only deposits at FDIC member banks are covered; investment accounts and credit union accounts use different insurance systems.
  • Coverage includes checking and savings accounts, money market accounts, and CDs, but not stocks, bonds, or mutual funds held at the bank.
  • If a bank fails, the FDIC pays out covered deposits, usually within a few business days.

How ownership categories change your coverage limit

Your coverage amount depends on how the account is titled. A savings account in your name alone is covered up to $250,000. If you add a spouse as a joint owner on that same account, the joint account is a separate category and gets its own $250,000 coverage — so together you could have $500,000 covered at one bank ($250,000 in your single account plus $250,000 in the joint account).

Retirement accounts (IRAs, SEP-IRAs, and SIMPLE IRAs) are insured separately from regular deposits. You can have $250,000 in an IRA and $250,000 in a regular savings account at the same bank, and both are fully covered. A revocable trust account (a savings account held in trust for someone else) is also a separate category with its own $250,000 limit.

Accounts held in the name of a business are a different category from personal accounts. If you own a sole proprietorship and also have a personal savings account at the same bank, each is covered separately up to $250,000. Accounts held in the name of a corporation or partnership follow their own rules and are not combined with personal deposits.

What is and is not covered by FDIC insurance

FDIC insurance covers money you deposit in the bank: savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs). It covers the principal and any interest that has been added to the account before the bank fails. It does not cover losses from fraud, theft, or unauthorized transfers — those are handled separately under different protections.

FDIC insurance does not cover investments. If your bank offers stocks, bonds, mutual funds, or brokerage services, those are not FDIC-insured even though they are held at the bank. Some banks have a separate brokerage division; money in that division is covered by Securities Investor Protection Corporation (SIPC) insurance instead, which has different limits and rules.

Safe deposit boxes are not covered by FDIC insurance. If you keep cash, jewelry, or documents in a safe deposit box at an FDIC member bank and the bank fails, the FDIC does not cover the contents. Safe deposit boxes are your responsibility to insure separately, usually through a homeowners or renters insurance policy.

How to structure multiple accounts to maximize coverage

If you have more than $250,000 to keep in savings, you can open accounts at different FDIC member banks to cover the full amount. A $500,000 savings balance could be split as $250,000 at Bank A and $250,000 at Bank B, with both amounts fully covered. This is the most straightforward way to protect large sums.

You can also use different ownership categories at the same bank. If you and your spouse each have $250,000 in individual accounts plus a $250,000 joint account, all three accounts at one bank are fully covered (total of $750,000). Add a revocable trust account in your name for another $250,000, and you have $1 million covered at a single institution.

Some people use a combination of both strategies. You might keep $250,000 in your name at Bank A, $250,000 in a joint account with your spouse at Bank A, and another $250,000 in your name at Bank B. The exact structure depends on how much money you have and how you want to organize it.

What happens if a bank fails and you are covered

If an FDIC member bank fails, the FDIC steps in and pays out covered deposits to depositors. The payout is automatic — you do not need to file a claim or take any action. The FDIC typically pays out within a few business days, though in rare cases it can take longer. You receive the funds in the same form they were in: if you had $200,000 in a savings account, you receive $200,000. If you had $300,000, you receive $250,000 (the covered amount).

The FDIC pays out to the account holder or, in the case of a joint account, to each joint owner. If you had a $250,000 joint account with your spouse, you each receive $125,000 (half of the covered amount). If you had a revocable trust account naming your child as the beneficiary, the FDIC pays the $250,000 to your child.

Bank failures are rare in the United States. The FDIC has been in operation since 1933, and the vast majority of banks remain solvent. The insurance exists as a safety net for the small number of cases where a bank does fail.

Checking whether your bank is FDIC insured

You can verify that your bank is FDIC insured by visiting the FDIC's Bank Find tool at banks.data.fdic.gov. Search for your bank by name and location. The tool shows whether the bank is an FDIC member, when it was insured, and which FDIC region covers it. If your bank does not appear in the search results, it is not FDIC insured.

Most large national banks and regional banks are FDIC members. Some online banks are also FDIC insured, though you should confirm before opening an account. Credit unions are not FDIC insured; they are insured by the National Credit Union Administration (NCUA), which has similar coverage limits but different rules.

If you have accounts at multiple banks, you can use the FDIC's deposit insurance calculator to determine your exact coverage across all of them. The calculator walks you through your account structure and shows how much is covered at each institution.

Frequently Asked Questions

Does FDIC insurance cover money I lose to fraud or theft?

No. FDIC insurance covers bank failures only. If someone steals your debit card or hacks your account, that is a separate issue handled under federal fraud protections and your bank's fraud liability policies. Report fraud to your bank immediately — federal law limits your liability, but the timeline matters.

If I have $300,000 at one bank, how much do I lose?

You lose $50,000. The FDIC covers $250,000, so the remaining $50,000 is uninsured. To protect the full $300,000, you would need to split it between two banks or use different ownership categories at the same bank.

Are savings accounts at online banks covered the same way?

Yes, if the online bank is FDIC insured. Most online banks are FDIC members and offer the same $250,000 coverage per category as traditional banks. Check the bank's website or use the FDIC Bank Find tool to confirm membership before opening an account.

What if I have a CD that matures after the bank fails?

CDs are covered by FDIC insurance just like savings accounts. If the bank fails before your CD matures, the FDIC covers the principal and any accrued interest up to $250,000. You do not receive the full CD term or the rate you locked in — you receive the covered amount as of the failure date.

Do I need to do anything to activate FDIC coverage?

No. FDIC coverage is automatic at all member banks. You do not need to register, pay a fee, or take any action. Simply having a deposit account at an FDIC member bank means you are covered up to the limit.