Brokerage firms, foreign banks without a U.S. charter, fintech apps, neobanks, crypto platforms, and non-depository industrial loan companies are examples of banks and bank-like institutions that are not FDIC insured. FDIC coverage applies only to deposit accounts at chartered member banks, capped at $250,000 per depositor, per insured bank, per ownership category. Anything outside that perimeter carries no federal deposit guarantee, and if the company fails, your money can be tied up for years or lost entirely.
Which Institutions Fall Outside FDIC Coverage
FDIC insurance protects checking accounts, savings accounts, money market deposit accounts, and certificates of deposit at member banks. It does not cover stocks, bonds, mutual funds, annuities, life insurance, crypto assets, or the contents of a safe deposit box.1Federal Deposit Insurance Corporation. Deposit Insurance The gap is wider than most people realize, because a lot of companies that feel like banks aren’t banks at all.
Brokerage Firms
A brokerage holds investments, not deposits, so it has no FDIC coverage by default. If a brokerage sweeps idle cash into a partner bank, that cash can be insured up to $250,000 at the partner bank. Your securities, however, are never FDIC-insured no matter where they sit.2Federal Deposit Insurance Corporation. Deposit Insurance FAQs
Foreign and International Banks
Banks operating solely outside the United States are not covered. Deposits at a foreign bank with no U.S.-chartered branch or subsidiary have no federal protection. Some foreign banks do run FDIC-insured U.S. branches, but funds held at their overseas offices remain uninsured.
Fintech Apps and Neobanks
This is the category that trips most people up. A fintech app offering checking, savings, or a debit card is almost never itself a bank. It’s a technology company partnered with an FDIC-insured bank behind the scenes. Whether your money is actually insured depends on whether it has been placed in a properly documented account at that partner bank.
Crypto Platforms
Cryptocurrency exchanges and platforms are not FDIC insured. Crypto assets are explicitly excluded from FDIC coverage, and the platforms themselves are not banks. A U.S. dollar balance held with a crypto company is only protected if it has been swept to a partner bank under valid pass-through conditions. Several crypto companies have faced FDIC enforcement actions for suggesting to customers that their balances were federally insured when they were not.
Industrial Loan Companies
Industrial loan companies that accept deposits have been FDIC-insured since 1982. Non-depository industrial loan companies, which are prohibited by their state charters from taking deposits, are not. If you’re placing money with one, check its status directly rather than assuming coverage from the company type.
The Pass-Through Trap Behind Fintech Apps
Fintech marketing often mentions FDIC insurance in a way that implies the app itself is covered. It isn’t. For pass-through insurance to actually reach you, three conditions have to be met at the partner bank:3FDIC.gov. Pass-through Deposit Insurance Coverage
- The funds must be owned by you, not by the fintech company.
- The bank’s account records must indicate the custodial nature of the account.
- Records held by the bank, the fintech, or a third party must identify you by name and show your ownership interest.
If any of those conditions breaks down, the deposit is insured as belonging to the fintech, not to you. The collapse of Synapse Financial Technologies in 2024 showed how badly this can go. More than 100,000 people lost access to over $265 million when the middleware company connecting fintech apps to partner banks went under. Synapse’s ledger records were unreliable, so partner banks couldn’t determine who owned what, and users waited months for access to their money.
Since January 2025, updated FDIC rules under 12 CFR Part 328 require non-bank companies to clearly disclose that they are not FDIC-insured institutions and that deposits are only protected once they reach an insured bank. Any use of FDIC-associated names, logos, or imagery by a non-bank that implies the company itself is insured violates federal law.4eCFR. 12 CFR Part 328 – FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo
What Happens if an Uninsured Institution Fails
When a financial company without federal deposit insurance goes under, no agency steps in to make depositors whole within a few days. Depositors become general unsecured creditors in a bankruptcy proceeding. That means they stand in line behind employees owed wages, administrative expenses, and tax obligations before seeing any recovery.5Office of the Law Revision Counsel. 11 U.S. Code 507 – Priorities
The liquidation routinely runs for years. Recovery may be partial as assets are sold, or nothing if liabilities exceed assets. Pursuing claims through counsel adds cost on top, with hourly rates for banking litigation attorneys commonly running from $162 to $392.
Even at an FDIC-insured bank, balances above $250,000 in a single ownership category are uninsured. When Silicon Valley Bank failed in 2023, the FDIC invoked a systemic risk exception to protect all depositors, including those with uninsured balances. That was extraordinary and required a special assessment on the banking industry to fund it.6FDIC. FDIC Acts to Protect All Depositors of the Former Silicon Valley Bank There is no legal requirement for the FDIC to protect uninsured deposits, and in a typical failure, depositors above the limit receive a receivership certificate and recover only what the liquidation can produce.
What Does Cover Your Money if Not FDIC
A few federal and private schemes protect money outside the FDIC system, but they aren’t interchangeable with it.
NCUA for Credit Unions
Federally insured credit unions are covered by the National Credit Union Administration through the National Credit Union Share Insurance Fund. Coverage mirrors FDIC: $250,000 per depositor, per insured credit union, per ownership category, backed by the full faith and credit of the United States government.7National Credit Union Administration. Share Insurance Coverage A small number of credit unions carry private share insurance instead. Private insurance is not federally backed. If your credit union’s documentation names a private insurer rather than NCUA, the guarantee is not the same.
SIPC for Brokerage Accounts
The Securities Investor Protection Corporation covers brokerage customers when a member firm fails or has assets stolen, up to $500,000 per customer, including a $250,000 sublimit for cash. SIPC recovers missing cash and securities from a failed brokerage. It does not protect against market losses or bad investment choices.8SIPC. What SIPC Protects
FDIC and SIPC solve different problems. FDIC covers deposit balances when a bank fails. SIPC covers cash and securities when a brokerage fails. Neither one insures you against a bad investment.
How to Verify Whether Your Institution Is FDIC Insured
Checking a bank takes about 30 seconds. The FDIC’s BankFind tool at banks.data.fdic.gov lets you search by name or location and returns the current insurance status, charter type, and regulator.9FDIC. BankFind Suite – Find Insured Banks
Every insured bank must display the official FDIC sign at branches where customers access deposit services. The same rule now applies online: an insured bank’s website and mobile app must display the official FDIC digital sign on the homepage, login page, and any page where you can open a deposit account.4eCFR. 12 CFR Part 328 – FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo
For credit unions, the NCUA’s Credit Union Locator at mapping.ncua.gov confirms federal share insurance. For fintech apps, look past the marketing. Find the name of the actual partner bank, search for it in BankFind, and read the app’s terms of service to see whether your funds are held in a custodial account at that bank in your name. That is what determines whether pass-through insurance actually applies to you, and it is the single most important thing to confirm before leaving significant money in a non-bank app.