FDIC insurance covers you per bank, not per account

FDIC insurance is per bank, meaning the Federal Deposit Insurance Corporation insures your deposits at each individual bank separately. If you have $250,000 at Bank A and $250,000 at Bank B, both are fully covered. If you have $500,000 at the same bank, only $250,000 is covered — the rest is uninsured.

The coverage limit is $250,000 per depositor, per bank, per ownership category. That last part matters: the same person can hold multiple accounts at one bank and still be covered up to $250,000 in each category. A joint account counts as a separate category from a single account, so you and your spouse could each have $250,000 in a joint account plus $250,000 in individual accounts at the same bank, and all four accounts would be covered.

The bank itself does not determine coverage — FDIC rules do. Your bank cannot give you more or less coverage than the law allows, and coverage does not depend on what the bank promises you in writing.

Key Takeaways

  • FDIC insurance protects $250,000 per person per bank, so spreading money across multiple banks increases your total coverage.
  • Different ownership categories at the same bank are insured separately — a joint account and an individual account are two different $250,000 limits.
  • The number of accounts you hold at one bank does not matter; only the ownership category matters.
  • Money in savings accounts, checking accounts, and money market accounts all count toward the same $250,000 limit at each bank.
  • Retirement accounts (IRAs) have their own $250,000 limit separate from regular deposit accounts at the same bank.

How the $250,000 limit works across multiple accounts at one bank

If you have a checking account, a savings account, and a money market account at the same bank, all three balances add together for FDIC coverage purposes. If the total is $250,000 or less, you are fully covered. If the total is $300,000, only $250,000 is insured and $50,000 is at risk if the bank fails.

The account type does not create separate coverage — only the ownership category does. A single person with ten different accounts at one bank still has one $250,000 limit. A married couple with a joint account at that same bank has a separate $250,000 limit for the joint account, and each spouse has a separate $250,000 limit for their individual accounts.

This is why people with large amounts of cash often use multiple banks. Someone with $750,000 to deposit could put $250,000 at Bank A, $250,000 at Bank B, and $250,000 at Bank C, and all three amounts would be fully insured.

Ownership categories that each get their own $250,000 limit

FDIC coverage divides accounts into categories based on who owns the money. Each category has its own $250,000 limit at each bank:

  • Single accounts — money owned by one person only.
  • Joint accounts — money owned by two or more people together. Each owner's share is insured up to $250,000.
  • Retirement accounts (IRAs) — traditional IRAs, Roth IRAs, and similar retirement accounts have their own $250,000 limit, separate from your other accounts at the same bank.
  • Trust accounts — money held in a revocable living trust is insured up to $250,000 per beneficiary, up to a total of $250,000 per trust.
  • Accounts for a minor — money held in a custodial account for a child is insured separately from the parent's own accounts.
  • Accounts held in a business name — sole proprietorships, partnerships, and corporations each have their own $250,000 limit.

A person can hold accounts in multiple categories at the same bank and be covered in each one. For example, a married person could have a $250,000 individual account, a $250,000 joint account with their spouse, and a $250,000 IRA, all at the same bank, and all three would be fully covered.

What happens when you move money between banks

When you transfer money from one bank to another, FDIC coverage follows the money to the new bank. The old bank's coverage ends when the money leaves; the new bank's coverage begins when the money arrives. There is no gap in coverage during the transfer itself.

If you are moving money specifically to increase your FDIC coverage, the transfer should complete within one to three business days for most banks. During that time, the money is covered at whichever bank currently holds it. Once it settles at the new bank, it counts toward that bank's $250,000 limit.

Some people use a service called CDARS (Certificate of Deposit Account Registry Service) to spread large deposits across multiple banks automatically. You deposit money at one bank, and CDARS splits it into $250,000 chunks at different banks behind the scenes. This is useful if you want to keep one banking relationship but need coverage for more than $250,000.

How to check your coverage at your current bank

The FDIC provides a tool called the FDIC Coverage Calculator on its website (fdic.gov). You enter your bank name, account type, and balance, and it tells you exactly how much is covered and how much is at risk.

You can also contact your bank directly and ask how much of your deposits are FDIC-insured. The bank is required to tell you, and many banks print this information on statements or in account agreements. Some banks also show your coverage amount in online banking.

If you have accounts in multiple categories at one bank, calculate each category separately. A joint account with $300,000 is only $250,000 covered, but if you also have an individual account at the same bank, that individual account has its own separate $250,000 limit.

What FDIC insurance does not cover

FDIC insurance covers deposits in checking, savings, and money market accounts. It does not cover stocks, bonds, mutual funds, or brokerage accounts, even if they are held at a bank-owned brokerage. It does not cover safe deposit boxes or their contents.

If you buy a certificate of deposit (CD) at a bank, the CD is covered by FDIC insurance up to $250,000. If you buy a CD through a brokerage, it is not covered by FDIC insurance — it is covered by SIPC (Securities Investor Protection Corporation) instead, which has different rules.

Insurance does not cover money lost to fraud, theft, or your own mistake. If someone steals your debit card and drains your account, that is a separate issue from FDIC coverage. Your bank may reimburse you under fraud protection rules, but FDIC insurance is not involved.

When FDIC insurance actually pays out

FDIC insurance only pays out if the bank fails and closes. The FDIC takes over the bank, freezes accounts, and then pays out covered deposits up to $250,000 per category. This process usually takes a few days to a few weeks.

If your bank fails, the FDIC will contact you. You do not need to file a claim or do anything special. The FDIC automatically pays out your covered balance to you or to your beneficiary if you have named one.

Bank failures are rare. The FDIC has insured deposits since 1933, and in that time, no depositor has lost a single dollar of FDIC-covered deposits. The insurance exists as a safety net, not as something most people will ever need to use.

Frequently Asked Questions

If I have $500,000 at one bank, how much is covered?

Only $250,000 is covered. The remaining $250,000 is uninsured and at risk if the bank fails. To cover all $500,000, you would need to split it between two banks, putting $250,000 at each one.

Does my spouse's account at the same bank reduce my coverage?

No. Your spouse's individual account is a separate ownership category, so it has its own $250,000 limit. A joint account you share is yet another category with its own $250,000 limit. All three can be fully covered at the same bank.

If I have an IRA and a checking account at the same bank, are they covered separately?

Yes. IRAs are a separate ownership category, so your IRA has its own $250,000 limit, and your checking account has its own $250,000 limit at the same bank. Both can be fully covered.

What if my bank is bought by another bank?

Coverage transfers to the new bank. If Bank A is bought by Bank B, your deposits at the old Bank A are now deposits at Bank B, and they count toward Bank B's $250,000 limit. You do not lose coverage during a merger.

Does FDIC insurance cover money I wire to someone else?

No. Once money leaves your account, FDIC insurance no longer applies to it. Insurance covers deposits held at the bank, not money in transit or held elsewhere.