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

The Federal Deposit Insurance Corporation protects $250,000 per person at each bank. That means if you have $250,000 in a savings account at Bank A and $250,000 in a savings account at Bank B, both are fully covered. If you have $400,000 in one savings account at one bank, the FDIC covers $250,000 and you lose $150,000 if the bank fails.

The $250,000 limit applies to each account category separately. A single savings account, a joint savings account, and a retirement account at the same bank are three different categories, so each gets its own $250,000 of coverage. This is where most people make mistakes — they think they have one $250,000 limit per bank, when they actually have multiple limits depending on how the accounts are titled.

Coverage is per depositor, not per account. If you own two savings accounts at the same bank under your name alone, the FDIC adds them together and covers only $250,000 total across both. If you and your spouse each own a savings account at the same bank, you each get $250,000 of coverage because you are separate depositors.

Key Takeaways

  • The FDIC covers $250,000 per person per bank per account category, so $250,000 in a savings account and $250,000 in a money market account at the same bank are both fully covered.
  • Multiple accounts under your name alone at the same bank are added together and share one $250,000 limit, regardless of how many accounts you open.
  • Joint accounts, retirement accounts, and trust accounts are separate categories with their own $250,000 limits at the same bank.
  • Spreading money across different banks is the only way to cover more than $250,000 per account category — each bank's FDIC limit is independent.
  • Money market accounts, checking accounts, and savings accounts are all covered up to $250,000 each if they are in different account categories.

How account categories change your coverage

The FDIC recognizes several account categories, and each one has its own $250,000 limit at the same bank. A single account (in your name alone) is one category. A joint account (shared with one or more other people) is a separate category. A retirement account (IRA, Roth IRA, SEP-IRA) is another category. A trust account (held in trust for a beneficiary) is yet another.

This means you could have $250,000 in a single savings account, $250,000 in a joint savings account with your spouse, and $250,000 in an IRA at the same bank, and all three amounts would be fully covered. The account titles are different, so they count as different categories.

Accounts in the same category do combine. If you have two IRAs at the same bank, both under your name, the FDIC adds them together and covers only $250,000 total. If you want to cover more than $250,000 in retirement accounts, you must open the second IRA at a different bank.

When spreading money across banks becomes necessary

If you have more than $250,000 in a single account category at one bank, the only way to cover the excess is to move it to a different bank. The FDIC limit does not increase if you have more money — it stays at $250,000 per category per bank, period.

A common scenario: you have $500,000 in a savings account at Bank A. The FDIC covers $250,000. To cover the remaining $250,000, you would move it to a savings account at Bank B. Now both banks cover $250,000 each, for a total of $500,000 in coverage.

This applies to any account category. If you have $600,000 in an IRA, you could keep $250,000 at your current bank and move $350,000 to an IRA at a second bank. The second bank would cover $250,000 of that $350,000, leaving $100,000 uncovered. To cover all $600,000, you would need to split it across three banks: $250,000 at Bank A, $250,000 at Bank B, and $100,000 at Bank C.

Joint accounts and coverage for both owners

A joint account is insured separately from single accounts, and the $250,000 limit applies to the account itself, not to each owner. If you and your spouse have a joint savings account with $250,000, the FDIC covers the full $250,000 — not $250,000 per person.

However, if you each also have individual savings accounts at the same bank, those are separate categories. You could have $250,000 in your single account, your spouse could have $250,000 in their single account, and you could have $250,000 in a joint account, all at the same bank, and all three amounts would be covered. The joint account is a different category from the single accounts.

If you and your spouse are both on a joint account and you also each have individual accounts at the same bank, the joint account coverage does not extend to your individual accounts. Each account category stands alone.

Retirement accounts and their separate limit

IRAs, Roth IRAs, SEP-IRAs, and other retirement accounts have their own $250,000 FDIC limit at each bank, separate from your savings or checking accounts. You could have $250,000 in a regular savings account and $250,000 in an IRA at the same bank, and both would be fully covered.

If you have multiple retirement accounts of the same type at the same bank — for example, two traditional IRAs — the FDIC combines them and covers only $250,000 total. If you have a traditional IRA and a Roth IRA at the same bank, those are separate categories, so each gets $250,000 of coverage.

This distinction matters when you are rolling over old retirement accounts or consolidating IRAs. If you roll an old 401(k) into an IRA at a bank where you already have an IRA, the two IRAs combine for FDIC purposes, and your total coverage at that bank stays at $250,000 for retirement accounts.

Trust accounts and beneficiary coverage

A trust account held for a beneficiary is covered separately from your personal accounts. The FDIC covers up to $250,000 per beneficiary per trust account category at each bank. If you hold a trust account for your child, that account gets its own $250,000 of coverage, separate from your personal savings account at the same bank.

If you hold trust accounts for multiple beneficiaries at the same bank, each beneficiary gets $250,000 of coverage. A trust account for your child and a trust account for your grandchild are two separate categories, so each is covered up to $250,000.

This is useful for parents or grandparents who want to set aside money for multiple children. You can cover $250,000 per child in trust accounts at the same bank, plus your own $250,000 in a personal account, plus your spouse's $250,000 in a personal account, all at one bank.

What happens to money over the limit

If a bank fails and you have more than $250,000 in a single account category at that bank, the FDIC pays out $250,000 to you. The amount over $250,000 is not covered, and you lose it. The FDIC does not reimburse you for the loss — the money is simply gone.

The FDIC typically processes payouts within a few business days of a bank closure. You do not have to file a claim or take any action; the FDIC identifies all accounts at the failed bank and pays out coverage automatically. If you have questions about whether your specific accounts are covered, you can use the FDIC's online coverage calculator before a failure happens.

Bank failures are rare in the United States, but they do occur. The FDIC has a fund backed by member bank premiums, not by taxpayer money, so coverage is available even if many banks fail at once. Since 2008, the FDIC has closed fewer than 20 banks per year on average.

How to check your coverage before a problem arises

The FDIC provides an online tool called the FDIC Coverage Calculator on its website. You enter your bank name, the account type, the balance, and how the account is titled (single, joint, trust, retirement), and the calculator tells you exactly how much is covered. This takes five minutes and removes all guesswork.

If you have accounts at multiple banks, run the calculator for each one. If you have multiple account categories at the same bank, run it for each category. The calculator is free and does not require you to log in or provide personal information beyond what you enter.

If your coverage is incomplete — for example, you have $400,000 in a savings account and only $250,000 is covered — you have time to move the excess to another bank. There is no rush, and moving money between banks takes one to three business days. The goal is to have a plan in place before a bank failure, not to scramble afterward.

Frequently Asked Questions

Does FDIC coverage apply to money market accounts?

Yes, money market accounts are covered the same way as savings accounts — up to $250,000 per depositor per bank per account category. A money market account and a savings account at the same bank are separate categories, so each gets $250,000 of coverage if they are titled differently (for example, one single and one joint).

If I have $300,000 in a joint account with my spouse, how much is covered?

The FDIC covers $250,000 of the $300,000. Joint accounts are insured as a single unit, not per person, so the $250,000 limit applies to the account itself. The remaining $100,000 is not covered. To cover all $300,000, you would need to move $50,000 to a joint account at a different bank.

Are CDs covered by FDIC insurance?

Yes, certificates of deposit are covered up to $250,000 per depositor per bank per category, just like savings accounts. If you have a CD and a savings account at the same bank under your name alone, they combine and share one $250,000 limit. If the CD is in a joint account, it is a separate category with its own $250,000 limit.

What if I have an IRA and a regular savings account at the same bank?

Both are covered up to $250,000 each because they are separate account categories. You could have $250,000 in an IRA and $250,000 in a savings account at the same bank, and both amounts would be fully covered by the FDIC.

Do I need to do anything to activate FDIC coverage?

No. FDIC coverage is automatic for all deposits at member banks. You do not need to sign up, pay a fee, or take any action. If your bank is FDIC-insured (most banks are), your deposits are covered up to the limits the moment you deposit them. You can verify your bank's FDIC membership on the FDIC website.