FDIC insurance protects money in deposit accounts at FDIC-insured banks if the bank fails, up to $250,000 per depositor, per bank, per ownership category. It covers checking, savings, money market deposit accounts and CDs. It does not cover stocks, bonds, mutual funds, annuities, Treasury securities or crypto, even when bought through a bank.
You have more cash sitting in one bank than you used to, maybe from a home sale, a bonus or money you are holding before investing it. Or your bank's branch also sells investments, and you are not sure which of your accounts carry the FDIC sticker's protection. Knowing exactly where the line falls lets you decide whether to spread money out or leave it where it is.
What is the FDIC?
The Federal Deposit Insurance Corporation is an independent U.S. government agency created by Congress in 1933 to insure bank deposits. According to the FDIC's guide to understanding deposit insurance, no depositor has lost a penny of FDIC-insured funds since the agency was founded.
Coverage is automatic. You do not apply or pay for it. Banks pay insurance premiums into the Deposit Insurance Fund, which the FDIC says is backed by the full faith and credit of the United States government.
How much does FDIC insurance cover?
The standard limit is $250,000 per depositor, per FDIC-insured bank, for each ownership category. All your deposits in the same ownership category at the same bank are added together, then insured up to $250,000. Deposits in a different category, or at a different bank, get their own $250,000.
What are the FDIC ownership categories?
Ownership category means the legal way you hold the account. The FDIC lists these main categories:
Single accounts
Accounts owned by one person with no named beneficiaries. All of them at one bank are added together and insured to $250,000.
Joint accounts
Accounts owned by two or more living people with equal withdrawal rights. Each co-owner's share of all joint accounts at the bank is insured to $250,000.
Certain retirement accounts
IRAs, self-directed 401(k) and Keogh accounts, and 457 plan deposits. Only the deposit portion is covered, and all of one person's retirement deposits at one bank are added together.
Trust accounts
Payable-on-death accounts and revocable or irrevocable trusts. Coverage depends on the number of beneficiaries, and the rules are detailed enough that it is worth checking with the FDIC's estimator.
Business and government accounts
Corporation, partnership and unincorporated association accounts, plus accounts held by government depositors.
A worked example
Here is how the rules on the FDIC's deposit coverage page apply in practice. Suppose you hold the following at one FDIC-insured bank:
| Account | Ownership category | Balance | Insured |
|---|---|---|---|
| Checking | Single | $60,000 | Yes |
| Savings | Single | $220,000 | Only $190,000 of the two single accounts combined |
| IRA CD | Certain retirement | $150,000 | Yes, separate limit |
| Joint savings with spouse | Joint | $400,000 | Yes, your $200,000 share plus your spouse's $200,000 share |
Your two single accounts total $280,000, so $30,000 is above the $250,000 single-account limit. The IRA and the joint account sit in different categories, so they are insured separately. Moving $30,000 to another bank, or into a different ownership category, would bring everything under coverage. The FDIC's Electronic Deposit Insurance Estimator (EDIE) will run this math for your own accounts.
What does FDIC insurance not cover?
FDIC insurance covers deposits only. The FDIC states plainly that it does not cover non-deposit investment products, even those offered by FDIC-insured banks. The FDIC lists these as not covered:
- Stocks and bond investments
- Mutual funds, including money market mutual funds
- Annuities and life insurance policies
- Safe deposit boxes or their contents
- U.S. Treasury bills, bonds or notes
- Municipal securities
- Crypto assets
It also does not cover the failure of any non-FDIC-insured company. A fintech app that holds your cash, for example, is only protected if the money actually sits in deposits at an insured bank and the records support it.
Is a money market fund the same as a money market account?
No, and the names cause real confusion. A money market deposit account is a bank deposit and is FDIC-insured. A money market mutual fund is an investment product, usually held at a brokerage, and is not FDIC-insured. Our comparison of Treasury bills, CDs and money market funds walks through how each one works.
How is FDIC insurance different from SIPC?
FDIC protects bank deposits if a bank fails. SIPC protects customers of a failed brokerage firm when cash and securities are missing from their accounts. Neither one protects you against market losses or bad investments. Our guide to what SIPC insurance covers explains the brokerage side in detail.
| FDIC | SIPC | |
|---|---|---|
| Protects | Bank deposits | Missing cash and securities at a failed brokerage |
| Standard limit | $250,000 per depositor, per bank, per category | $500,000 per customer, including up to $250,000 cash |
| Covers market losses? | No | No |
How do you check whether your money is insured?
Three quick steps:
- Confirm the bank is insured. Search the name in the FDIC's BankFind Suite. Look for the exact legal name, since some apps and brands are not banks themselves.
- List your accounts by category. Add up the balances in each ownership category at each bank.
- Run EDIE or call the FDIC. The FDIC's help line is 1-877-ASK-FDIC (1-877-275-3342).
Private investments, including private credit funds and private placements, carry no FDIC coverage at all. Any offering that suggests otherwise is a warning sign covered in our guide to spotting investment fraud.
Frequently asked questions
Do I need to apply for FDIC insurance?
No. The FDIC says coverage is automatic whenever you open a deposit account at an FDIC-insured bank.
Is my IRA FDIC-insured?
Only the parts held in bank deposits, such as an IRA CD or IRA savings account at an insured bank. Stocks, funds or other investments inside an IRA are not FDIC-insured.
Can I have more than $250,000 insured at one bank?
Yes, if your deposits are spread across different ownership categories, such as single, joint and retirement accounts. Each category at each bank has its own $250,000 limit.
Are Treasury bills FDIC-insured?
No. The FDIC lists Treasury bills, bonds and notes as not covered. They are obligations of the U.S. government itself, which is a different kind of backing from deposit insurance.
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