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

The Federal Deposit Insurance Corporation (FDIC) protects your money if the bank fails, but only up to a limit. That limit is $250,000 per depositor, per insured bank, per account ownership category. If you have $300,000 in a checking account at one bank, the FDIC covers $250,000 and you lose the rest.

The $250,000 limit has been in place since 2008. It applies to each separate bank you use, so if you have $250,000 at Bank A and $250,000 at Bank B, both are fully covered. The limit also depends on how the account is titled — a joint account is covered separately from an individual account at the same bank.

FDIC coverage is automatic. You do not need to sign up, pay a fee, or register your account. If your bank fails, the FDIC steps in and either transfers your account to another bank or sends you a check. The process usually takes a few days to a few weeks.

Key Takeaways

  • The FDIC covers $250,000 per person, per bank, per account type, so splitting money across banks or account titles can protect more than $250,000.
  • Joint accounts, retirement accounts, and trust accounts are each covered separately from individual accounts at the same bank.
  • Coverage is automatic and free — you do not need to register or take any action.
  • Money in savings accounts, checking accounts, and money market accounts is covered; brokerage accounts and mutual funds are not.
  • If your bank fails, the FDIC typically transfers your account to another bank within a few business days.

How account ownership type changes your coverage

The FDIC counts coverage separately based on how the account is titled. An individual account, a joint account, and a retirement account at the same bank are three separate coverage buckets, each with its own $250,000 limit.

An individual account in your name alone is covered up to $250,000. If you are married and have a joint account with your spouse, that joint account is covered separately up to $250,000 — so together you could have $500,000 covered at one bank if you have both an individual account and a joint account.

A retirement account — such as a traditional IRA, Roth IRA, or SEP-IRA held at a bank — is covered up to $250,000 separately from any other account you have at that bank. A trust account is also covered separately, up to $250,000 per beneficiary named in the trust.

If you have a business account, the FDIC covers it separately from your personal accounts, up to $250,000. The same applies to accounts held in the name of a corporation, partnership, or other business entity.

What happens if you exceed $250,000 at one bank

Money above $250,000 in a single account ownership category at one bank is not covered by the FDIC. If your bank fails and you have $300,000 in an individual checking account, you lose $50,000.

The most straightforward way to protect money above $250,000 is to split it across different banks. If you have $500,000, you could keep $250,000 at Bank A and $250,000 at Bank B, and both amounts would be fully covered. Each bank is insured separately.

You can also use different account ownership categories at the same bank. If you have $250,000 in an individual account and $250,000 in a joint account with your spouse at the same bank, both are covered. Adding a retirement account or trust account creates additional separate coverage.

The FDIC provides a Coverage Calculator on its website where you can enter your account details and see exactly how much is covered. This tool accounts for all the different ownership categories and helps you plan if you have money at multiple banks.

Account types that are covered and not covered

The FDIC covers money in deposit accounts: checking, savings, money market deposit accounts, and certificates of deposit (CDs). All of these are treated the same way for coverage purposes — the $250,000 limit applies to the total across all of them at one bank in one ownership category.

If you have $150,000 in a savings account and $120,000 in a checking account at the same bank under your name alone, the FDIC covers only $250,000 total, not $270,000. The two accounts are added together.

The FDIC does not cover brokerage accounts, stocks, bonds, mutual funds, or money market funds. If your bank offers a brokerage service and you buy stocks or mutual funds through it, those are not FDIC-insured. They may be covered by the Securities Investor Protection Corporation (SIPC) instead, which is a different insurance system with different limits.

Safe deposit boxes are also not covered by the FDIC. If you keep cash, jewelry, or documents in a safe deposit box and the bank fails, the FDIC does not protect the contents. You would need to file a claim directly with the bank or its receiver.

How to check if your bank is FDIC-insured

Not all banks are FDIC-insured. Most traditional banks are, but some online banks, credit unions, and other financial institutions are not. Before you open an account or move money, you can check whether the bank is insured.

The FDIC maintains a searchable database called the Bank Find tool on its website. You enter the bank name and state, and it tells you whether that bank is FDIC-insured and shows you the exact coverage limits for your account type.

Credit unions are not FDIC-insured; they are insured by the National Credit Union Administration (NCUA), which offers similar coverage — up to $250,000 per member, per credit union, per account ownership category. The rules are nearly identical to FDIC coverage.

If a bank is not FDIC-insured, your deposits are not protected if the bank fails. This is rare for large, established banks but more common for smaller or newer institutions. Always verify before opening an account with a bank you do not recognize.

What happens when a bank fails and the FDIC steps in

If an FDIC-insured bank fails, the FDIC takes over and protects your money. In most cases, your account is transferred to another bank within one to three business days. You keep your account number, your debit card continues to work, and you can access your money without interruption.

The FDIC notifies you by mail about the transfer and tells you which bank now holds your account. If you had automatic payments or direct deposits set up, you may need to update those with the new bank, though the FDIC sometimes handles this automatically.

If your account cannot be transferred to another bank, the FDIC sends you a check for the insured amount (up to $250,000) within a few weeks. This is rare — most failed banks are taken over by another bank that assumes the deposits.

Money above the $250,000 limit becomes part of the failed bank's assets and may be recovered later, but there is no may provide. Creditors and depositors with uninsured balances are paid only after the FDIC and other creditors are satisfied, which can take months or years.

Strategies for protecting more than $250,000

If you have more than $250,000 to keep safe, you have several options. The simplest is to use multiple banks. You can open accounts at different FDIC-insured banks and keep $250,000 at each one. There is no limit on how many banks you can use.

You can also use different account ownership categories at the same bank. A married couple could have an individual account ($250,000), a joint account ($250,000), and each spouse could have a retirement account ($250,000 each), for a total of $750,000 covered at one bank.

If you have a trust, you can name multiple beneficiaries in the trust document. The FDIC covers up to $250,000 per beneficiary in a trust account, so a trust with three named beneficiaries could hold up to $750,000 in coverage. This requires proper trust documentation and the account must be titled in the trust's name.

For very large amounts, some people use a combination of banks, account types, and trust structures. The FDIC Coverage Calculator can help you model different scenarios to see how much you can protect.

Frequently Asked Questions

Does FDIC coverage apply if I lose my debit card or someone steals my account information?

No. FDIC coverage only protects you if the bank itself fails. If someone steals money from your account through fraud or theft, that is a different issue handled by your bank's fraud protection and your rights under federal consumer protection laws. Report unauthorized transactions to your bank immediately.

Are savings accounts and checking accounts covered separately?

No. Both are covered under the same $250,000 limit for individual accounts at one bank. If you have $150,000 in savings and $120,000 in checking at the same bank in your name, the FDIC covers only $250,000 total, not both amounts in full.

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

CDs are covered by the FDIC up to $250,000, just like savings and checking accounts. If the bank fails before your CD matures, the FDIC honors the CD and either transfers it to another bank or pays you the balance plus accrued interest up to the coverage limit.

Can I get more than $250,000 covered if I name a beneficiary on my account?

Naming a beneficiary on a payable-on-death (POD) account creates separate coverage for that beneficiary. If you have a POD account naming your child as beneficiary, that is covered separately from your individual account, up to $250,000. Each named beneficiary gets their own $250,000 of coverage.

Is my money covered if the bank is bought by another bank?

Yes. A bank acquisition is not the same as a bank failure. When one bank buys another, your account simply transfers to the new owner and remains FDIC-insured. You keep your money and your coverage continues without interruption.