The FDIC insures up to $250,000 per depositor, at each insured bank, for each ownership category you use. That single number does more work than it looks like: because it applies separately to each ownership category and separately at each bank, one person can protect well over $250,000 without leaving the FDIC-insured system. The question of how much money the FDIC insures per depositor has a short answer and a longer one, and the longer one is where most of the coverage lives.
The $250,000 Rule
Federal law sets the standard maximum deposit insurance amount at $250,000.1Office of the Law Revision Counsel. 12 USC 1821 – Insurance Funds The limit applies three ways at once: per depositor, per insured bank, and per ownership category. Hold $250,000 in a savings account in your name alone at one bank, and the whole balance is covered. Hold $300,000 in that same account, and $50,000 is uninsured.
Coverage counts both your principal and any interest accrued through the date the bank closes. A CD with a $245,000 principal and $7,000 of accrued interest totals $252,000, and $2,000 of it would be uninsured.2FDIC.gov. Deposit Insurance FAQs If your balances sit near the limit, that accrual matters.
Since the FDIC began insuring deposits in 1934, no depositor has lost a penny of insured funds in a bank failure.3FDIC.gov. About
What Actually Counts as an Insured Deposit
FDIC insurance covers traditional deposit products at insured banks:4FDIC.gov. Your Insured Deposits
- Checking accounts, interest-bearing or not
- Savings accounts and NOW accounts
- Money market deposit accounts
- Certificates of deposit
- Cashier’s checks and money orders the bank has issued5FDIC.gov. Deposit Insurance at a Glance
Plenty of products sold at bank branches are not deposits and are not insured, including stocks, bonds, mutual funds, life insurance, annuities, municipal securities, crypto assets, and U.S. Treasury securities.6FDIC.gov. Financial Products That Are Not Insured by the FDIC Safe deposit box contents are also not FDIC-insured; the box is storage, not a deposit account.7FDIC.gov. Five Things to Know About Safe Deposit Boxes, Home Safes and Your Valuables Treasuries carry the federal government’s separate backing, but that backing is not the FDIC’s.
How Ownership Categories Multiply Your Coverage at One Bank
The $250,000 limit resets in each ownership category you use at the same institution. Federal regulations recognize several distinct categories, and deposits in each are insured independently.8eCFR. 12 CFR Part 330 – Deposit Insurance Coverage This is where a single depositor can hold far more than $250,000 at one bank and still be fully covered.
Single Accounts
A single ownership account is any deposit owned by one person with no beneficiaries. All your individual accounts at one bank, whether checking, savings, or CDs, are added together toward one $250,000 limit.8eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
Joint Accounts
Joint accounts give each co-owner $250,000 of coverage. A married couple with a shared account can protect up to $500,000 in that account, on top of whatever each spouse holds individually.8eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
Trust Accounts
Revocable and irrevocable trust accounts are insured at $250,000 per eligible beneficiary named by each owner, capped at $1,250,000 per owner at one bank when five or more beneficiaries are named. Naming a sixth or seventh beneficiary does not add coverage.9FDIC.gov. Trust Accounts The bank’s records have to identify the account as a trust and identify the beneficiaries. For informal trusts such as payable-on-death accounts, the beneficiaries must be named in the deposit records; for formal trusts, the account title must identify it as a trust.
Retirement Accounts
Certain retirement deposits get their own $250,000 limit per owner, per bank, separate from your other categories.1Office of the Law Revision Counsel. 12 USC 1821 – Insurance Funds Traditional and Roth IRAs, SEP and SIMPLE IRAs, self-directed 401(k) and Keogh plans, and Section 457 deferred compensation plans all fall in this category. They are added together toward a single $250,000 cap. A Traditional IRA of $180,000 and a Roth IRA of $100,000 at the same bank total $280,000, leaving $30,000 uninsured. Naming beneficiaries on a retirement account does not raise the limit.10FDIC.gov. Certain Retirement Accounts
Business Accounts
Deposits held by a corporation, partnership, or LLC are insured up to $250,000 separately from the personal accounts of the owners or officers, provided the entity is validly formed under state law and operates for a legitimate business purpose rather than to inflate coverage.11FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts Sole proprietorships are the exception: their deposits combine with the owner’s personal single ownership accounts under one $250,000 limit.8eCFR. 12 CFR Part 330 – Deposit Insurance Coverage
Employee Benefit Plans
Deposits held by a pension or profit-sharing plan get pass-through coverage: each participant’s non-contingent interest in the plan is insured up to $250,000. In a defined contribution plan, that interest is the participant’s account balance on the date the bank fails.12FDIC.gov. Employee Benefit Plan Accounts
Using More Than One Bank
The $250,000 cap applies separately at each FDIC-insured bank. Keep $250,000 at Bank A and $250,000 at Bank B, and both amounts are fully insured.13FDIC.gov. Deposit Insurance – Understanding Deposit Insurance For large sums, this is the simplest way to expand coverage beyond what one institution can offer.
Some cash management and sweep programs do this for you, spreading a single balance across a network of insured banks. These arrangements use pass-through deposit insurance, where a third party places funds on your behalf. For the pass-through coverage to work, either the bank’s records or the third party’s records must identify you as the actual owner and show how much is yours.14FDIC.gov. Pass-through Deposit Insurance Coverage Without that recordkeeping, the whole pool can end up insured only in the third party’s name, capped at $250,000 regardless of how many customers’ money is inside.
If Your Balance Is Above the Limit and the Bank Fails
Federal law requires the FDIC to pay insured deposits “as soon as possible” after a bank fails, and the agency aims to do so within two business days.15FDIC.gov. Payment to Depositors You usually get access to insured funds quickly, either through a check from the FDIC or by having the deposits transferred to another insured bank. Trust accounts with formal agreements, brokered deposits, and employee benefit plan accounts can take longer because of the extra documentation involved.
Anything above the insured limit is a different matter. The FDIC pays the insured $250,000 and issues a Receiver’s Certificate for the uninsured balance. That certificate is a claim against the failed bank’s remaining assets. You may recover some or all of the uninsured portion as those assets are sold, but recovery is not guaranteed and the process takes time.15FDIC.gov. Payment to Depositors
Credit Unions Are a Separate System
If your account is at a credit union, the FDIC does not cover it. Credit union deposits are insured instead by the National Credit Union Share Insurance Fund, administered by the NCUA, at the same $250,000 per depositor, per insured credit union, per ownership category.16NCUA. Share Insurance Coverage The number is the same; the insurer is not.