FDIC Bank Insurance: Coverage, $250,000 Limit, and Categories

FDIC bank insurance automatically protects up to $250,000 per depositor, per insured bank, for each ownership category. That limit has held since 2008 and still applies in 2026. You don’t apply, pay a premium, or sign anything to get it — if your bank is FDIC-insured, your eligible deposits are covered the moment you make them. By spreading money across ownership categories or across separate banks, you can protect balances well above the $250,000 headline number.

How the $250,000 Limit Actually Works

Federal law sets the standard maximum deposit insurance amount at $250,000, defined in the Federal Deposit Insurance Act.¹ Three variables decide how much of your money is actually insured: who owns the account, which bank holds it, and what ownership category it falls into.

Within one ownership category at one bank, all your deposits are added together. Say you have $50,000 in checking and $200,000 in savings at the same bank, both in your name alone. The FDIC treats that as $250,000, fully insured. Add a $25,000 CD in your name at that same bank and the total is $275,000, with $25,000 uninsured. Coverage includes principal plus any interest accrued through the date the bank fails, so the number that matters is the combined balance on closing day.²

One point trips people up regularly: different branches of the same bank count as one institution. Holding $200,000 at a downtown branch and $100,000 at a branch across town gives you $300,000 at one bank, not two separate deposits. To spread risk across institutions, you need genuinely separate banks.³

What FDIC Insurance Covers and What It Doesn’t

FDIC insurance applies to deposit products only. The covered list is short and familiar:⁴

Checking accounts
Savings accounts
Money market deposit accounts
Certificates of deposit
Cashier’s checks and money orders issued by the bank

Investment products sold through a bank carry market risk and are not insured, even if you buy them at a teller window. That includes stocks, bonds, mutual funds, annuities, life insurance policies, and municipal securities. U.S. Treasury bills, bonds, and notes are backed by the federal government’s own guarantee but not by FDIC insurance. Crypto assets are not insured either. Federal law now specifically prohibits stablecoin operators from advertising that their tokens carry FDIC deposit insurance protection, so a platform implying otherwise is a warning sign.

Safe deposit box contents are also outside the FDIC’s scope. A safe deposit box is a storage service, not a deposit account, and cash or valuables kept inside are not insured against theft or damage.⁵

Fintech apps that offer “banking” features sometimes aren’t banks at all. Some sweep customer cash to partner banks and advertise FDIC coverage on that basis. Pass-through insurance is real, but it depends on the funds actually being owned by you, the bank’s records reflecting the custodial arrangement, and the records identifying you as the beneficial owner. When those conditions aren’t met, the whole customer pool may be insured only to the broker as a single depositor — $250,000 total for everyone combined.⁶

Ownership Categories That Multiply Coverage

Deposits held in different ownership categories at the same bank are insured separately, each up to $250,000.⁷ That’s how a person or couple can be fully insured on far more than the $250,000 headline number at a single institution.

Single Accounts

Any deposit owned by one person without named beneficiaries is a single account. All single accounts you hold at the same bank are added together and insured up to $250,000, whether that’s checking, savings, CDs, or anything else titled in your name alone.⁴

Joint Accounts

Each co-owner is insured up to $250,000 for their share of all joint accounts at the same bank. The FDIC assumes equal ownership unless bank records show otherwise. A couple with a $500,000 joint account is fully covered, with $250,000 attributed to each person. Joint coverage sits on top of each person’s single-account coverage, so the same couple could also each hold $250,000 in individual accounts at that bank and be fully insured across the board.⁸

Retirement Accounts

Traditional, Roth, SEP, and SIMPLE IRAs share their own category. All your IRA deposits at the same bank are combined and insured up to $250,000, separate from your other accounts. Adding beneficiaries does not increase the IRA limit. A $100,000 Roth and $180,000 traditional IRA at the same bank total $280,000, of which $250,000 is insured and $30,000 is not.⁹

Trust Accounts

Trust deposits offer the highest coverage. The FDIC insures them at $250,000 per eligible beneficiary, capped at $1,250,000 per trust owner when five or more beneficiaries are named. The formula is number of owners × number of beneficiaries × $250,000, up to that $1,250,000 ceiling per owner. A revocable trust naming three beneficiaries is covered up to $750,000. A trust naming seven beneficiaries still tops out at $1,250,000, because beneficiaries beyond five add no additional coverage.¹⁰

All deposits a single owner holds in informal revocable trusts (like payable-on-death accounts), formal revocable trusts, and irrevocable trusts at the same bank are combined for insurance purposes. Opening multiple trust accounts with the same beneficiaries at the same bank does not stack additional coverage.¹⁰

Business Accounts

Deposits held by a corporation, partnership, LLC, or unincorporated association are insured up to $250,000, separate from the owners’ personal deposits. The business must be doing legitimate independent activity, not a shell set up to expand coverage. Different divisions or departments of the same entity don’t get separate coverage; all deposits of one corporation at one bank are aggregated to the $250,000 limit no matter how many accounts or signers exist.¹¹

Separately incorporated subsidiaries with their own independent operations do get their own $250,000, apart from the parent. Sole proprietorships and DBAs do not; those deposits are lumped in with the owner’s personal single accounts.¹¹

Employee Benefit Plan Accounts

Employer-sponsored plans like 401(k)s that hold deposits at an insured bank get pass-through coverage of up to $250,000 per participant, based on each participant’s non-contingent interest as of the date the bank fails.⁷

How to Confirm a Bank Is FDIC-Insured

Not every institution that looks like a bank carries FDIC insurance. Two free tools let you check.

BankFind, the FDIC’s search tool, lets you look up an institution by name, website, or FDIC certificate number. Filter results to “Active” status to see only currently insured institutions.¹²

The Electronic Deposit Insurance Estimator, or EDIE, walks you through your accounts at one bank at a time and calculates exactly how much is insured and how much is exposed. If you use multiple banks, run the calculator once per bank.¹³

FDIC-insured banks are also required to display the official FDIC sign at physical branches. Updated rules taking effect in 2027 will require insured banks to display a digital FDIC sign on homepages, login pages, and account-opening screens across websites, mobile apps, and ATMs.¹⁴

What Happens If Your Bank Fails

Bank failures are uncommon. When one happens, the FDIC steps in as receiver and works to get insured depositors their money quickly. You don’t file a claim. The FDIC uses the bank’s own records to determine balances and coverage.

Its stated goal is to make insurance payments within two business days of closing.¹⁵ Most failures are resolved through a purchase and assumption transaction, where a healthy bank takes over the failed bank’s deposits and your accounts move to the new institution with little interruption. In a straight deposit payoff, where no acquiring bank steps in, the FDIC pays insured depositors directly, generally by the next business day. Insurance covers principal plus interest accrued through the closing date. Interest stops accruing then.²

Deposits above the limit are not automatically lost, but they’re not guaranteed either. The FDIC sells the failed bank’s assets over time and pays uninsured depositors on a pro-rata basis. Those payments trickle in, sometimes over years, and the total recovery depends on what the assets fetch. In some failures uninsured depositors get back most of their money; in others considerably less.³

When a Depositor Dies

The FDIC gives a six-month grace period after a deposit owner’s death, during which the accounts continue to be insured as if the owner were still alive. This lets families sort out estate matters without losing coverage. After six months, insurance is calculated based on actual ownership, which usually means the funds fold into an heir’s or the estate’s own coverage limits.⁷

Funds in a decedent account managed by an executor are treated as the deceased person’s single account deposits and insured up to $250,000. Once heirs receive distributions, they need to check their own coverage, because an inheritance that pushes a balance past $250,000 at the same bank leaves the excess uninsured.¹⁶

Credit Unions Use a Separate System

If your money is at a credit union, the FDIC does not cover it. The National Credit Union Administration insures credit union deposits through the Share Insurance Fund, using the same $250,000 per depositor, per institution, per ownership category structure. Nearly all federal credit unions and most state-chartered credit unions carry this coverage. The dollar protection is identical; only the insuring agency changes.

1
Office of the Law Revision Counsel. 12 USC 1821 – Insurance Deposits
2
FDIC.gov. When a Bank Fails – Facts for Depositors, Creditors, and Borrowers
3
FDIC.gov. Deposit Insurance FAQs
4
FDIC.gov. Understanding Deposit Insurance
5
Federal Deposit Insurance Corporation. Five Things to Know About Safe Deposit Boxes, Home Safes and Your Valuables
6
FDIC.gov. Pass-through Deposit Insurance Coverage
7
eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
8
FDIC.gov. Financial Institution Employees Guide to Deposit Insurance – Joint Accounts
9
FDIC.gov. Certain Retirement Accounts
10
FDIC.gov. Trust Accounts
11
FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts
12
FDIC. BankFind Suite – Find Insured Banks
13
FDIC. Electronic Deposit Insurance Estimator (EDIE) – Calculator
14
Federal Register. FDIC Official Signs, Advertisement of Membership, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDICs Name or Logo
15
FDIC.gov. Payment to Depositors
16
FDIC.gov. Financial Institution Employees Guide to Deposit Insurance – Single Accounts