Online savings accounts are FDIC insured if the bank holding your money is an FDIC member — which most online banks are, but not all.

The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks up to $250,000 per depositor, per bank, per account category. An online savings account sits in the same category as a traditional savings account at a brick-and-mortar bank. The FDIC does not care whether you opened it in person or through a website. What matters is whether the institution holding your money is an FDIC member bank.

Most large online banks — including Ally, Marcus, Discover, and American Express Personal Savings — are FDIC members. But some online financial services are not banks at all. Money market funds, brokerage accounts, and peer-to-peer lending platforms do not carry FDIC insurance. A few online banks operate under a different charter and may not be FDIC members. Before you move money, you need to know which type of institution you are dealing with.

Key Takeaways

  • FDIC insurance covers up to $250,000 per person per bank per account type, regardless of whether the bank operates online or has physical branches.
  • You can confirm FDIC membership by searching the bank's name on the FDIC's official BankFind tool at fdic.gov/bankfind.
  • Online banks that are not FDIC members — including some fintech platforms and money market funds — leave your deposits uninsured against bank failure.
  • If you have more than $250,000 at one bank, you can protect the excess by opening accounts in different ownership categories, such as a joint account or a retirement account.

How to verify FDIC membership for your online bank

The FDIC maintains a searchable database called BankFind at fdic.gov/bankfind. Type in the name of your bank or the website where you opened the account. The search will tell you whether that institution is FDIC insured and show you the exact legal name of the bank holding your deposits.

This step matters because the legal entity name may differ from the brand name. For example, Ally Bank operates under the legal name "Ally Bank" and is FDIC insured. Marcus by Goldman Sachs operates under the legal name "Marcus Bank" and is also FDIC insured. But if you search and find no result, or if the result says "not FDIC insured," your deposits are not protected by the FDIC.

You can also check your account statements or the bank's website. Most FDIC member banks display an FDIC logo or a statement confirming membership somewhere on their site, usually in the footer or in a "Security" or "About Us" section. But the BankFind search is the authoritative source.

What FDIC insurance actually covers in an online savings account

FDIC insurance covers the balance in your savings account up to $250,000 if the bank fails. It does not cover losses from fraud, hacking, or poor investment performance. It does not cover money you lent to someone else or money held in a brokerage account. It covers only deposits at the bank itself.

The $250,000 limit applies per depositor, per bank, per account category. If you have $200,000 in a savings account and $100,000 in a money market account at the same FDIC member bank, both are covered in full because they are different account categories. But if you have $300,000 in one savings account at one bank, only $250,000 is insured. The remaining $50,000 is at risk if the bank fails.

Joint accounts are a separate category. If you and your spouse each own a joint account at the same bank, each of you is insured up to $250,000 in that joint account. Retirement accounts (IRAs, SEP-IRAs, and similar) are also separate categories. You can hold $250,000 in a regular savings account and another $250,000 in an IRA at the same bank, and both are fully insured.

Online banks that are not FDIC insured

Some online financial platforms are not banks and do not carry FDIC insurance. Money market funds offered through brokerage firms are not FDIC insured, even if they hold cash. Peer-to-peer lending platforms do not insure deposits. Cryptocurrency exchanges do not carry FDIC insurance. If you see an online service offering high interest rates but no mention of FDIC insurance, search BankFind to confirm.

A few online banks operate under a different charter — such as a state-chartered bank that did not join the FDIC — and are not FDIC members. These are rare, but they exist. If BankFind shows no result for your bank, contact the bank directly and ask whether it is FDIC insured. If the answer is no, your deposits are uninsured against bank failure.

What happens to your money if an FDIC member bank fails

If an FDIC member bank fails, the FDIC steps in as receiver. It typically arranges for another bank to assume your deposits, and you keep access to your money within one to two business days. You do not have to do anything. Your account simply moves to the new bank, and your balance up to $250,000 is protected.

If no bank agrees to take over your account, the FDIC pays you directly. This process has historically taken a few weeks. You receive a check or a transfer to an account you designate. Again, you are covered up to $250,000 per account category.

Bank failures are rare. The FDIC has insured deposits since 1933, and the insurance fund has never been depleted. But the protection exists precisely because failure is possible, and FDIC insurance means you do not bear that risk.

Protecting deposits over $250,000 at one bank

If you have more than $250,000 at a single FDIC member bank, you can spread the excess across different account categories to keep it all insured. Open a joint account with a spouse or partner — that account is insured separately up to $250,000. Open an IRA or other retirement account — that is another $250,000 of coverage. Open an account in trust for a beneficiary — that is another category.

Each category is insured independently. A single person with $500,000 could hold $250,000 in a regular savings account and $250,000 in an IRA at the same bank, and both amounts would be fully insured. The FDIC website has a detailed breakdown of all account categories and how they interact.

Alternatively, you can move the excess to a different FDIC member bank. If you have $400,000, you could keep $250,000 at Bank A and move $150,000 to Bank B. Both amounts are then fully insured because they are at different banks.

Why online banks can offer higher interest rates while staying FDIC insured

Online banks have lower overhead than brick-and-mortar banks — no physical branches, no tellers, no rent on storefronts. They pass some of that savings to customers in the form of higher interest rates on savings accounts. FDIC insurance does not prevent them from offering competitive rates. It simply protects your balance if the bank fails.

A high interest rate does not mean the bank is risky or uninsured. It means the bank has chosen to compete on rate rather than on convenience or brand recognition. As long as the bank is FDIC insured and you stay within the $250,000 limit per category, your money is protected the same way it would be at any other member bank.

Frequently Asked Questions

Can I lose money in an FDIC insured online savings account?

You can lose money only if the bank fails and your balance exceeds $250,000 in that account category at that bank. FDIC insurance does not protect you from fraud, hacking, or poor decisions. If someone hacks your account and transfers money out, that is a separate matter from FDIC insurance. Report it to the bank and to law enforcement.

Does FDIC insurance cover money I transfer between online banks?

Yes. Money in transit between banks is still held by one bank or the other at any given moment, and FDIC insurance covers it at whichever bank is holding it. Once the transfer completes and the money arrives at the new bank, it is insured there up to $250,000 per category.

What if my online bank is FDIC insured but gets bought by another bank?

Your deposits remain insured. If Bank A (FDIC insured) is acquired by Bank B (also FDIC insured), your account moves to Bank B and stays insured. If the acquiring bank is not FDIC insured, that would be unusual and would be disclosed to you before the merger closes. You would have time to move your money if you chose to.

Are online savings accounts safer than regular savings accounts?

FDIC insurance is the same for both. An online savings account at an FDIC member bank is insured identically to a savings account at a bank with branches. The difference is convenience and interest rate, not safety. Both are protected up to $250,000 per category if the bank fails.

How do I know if my online bank is a real bank or just a platform?

Search the bank's name on BankFind at fdic.gov/bankfind. If it appears in the results, it is an FDIC member bank. If it does not appear, it is either not a bank or not FDIC insured. You can also look at the bank's website for language about being "FDIC insured" or "member FDIC." Real banks display this prominently.