Money held in a bank is federally insured up to $250,000 per depositor, per insured bank, per ownership category. That is the standard maximum deposit insurance amount set by the FDIC, and it has been fixed at that figure since the Dodd-Frank Act made it permanent in 2010.1Office of the Law Revision Counsel. 12 USC 1821 – Insurance Funds Credit unions carry the same $250,000 cap through the NCUA.2Office of the Law Revision Counsel. 12 USC 1787 – Payment of Insurance Coverage is automatic, so you don’t apply or pay a premium; the banks fund the insurance themselves through assessments into the Deposit Insurance Fund.3FDIC.gov. What We Do
The important word in that answer is “category.” A single $250,000 cap is a floor, not a ceiling. By using different ownership structures at the same bank, one household can protect well over $1 million without opening an account anywhere else.
How the $250,000 Limit Gets Calculated
The FDIC adds together every account you hold in the same ownership category at the same bank and insures the total up to $250,000. Two accounts under your name alone at the same institution, one holding $150,000 and one holding $120,000, come to $270,000 combined. That leaves $20,000 uninsured. The calculation also includes accrued interest through the date the bank fails, so a CD that started under the cap can drift over it.4FDIC.gov. Deposit Insurance FAQs
Different branches of the same bank do not get separate coverage. A $200,000 CD at one branch and a $100,000 savings account at another branch of the same institution are treated as $300,000 in one category at one bank.5FDIC.gov. Your Insured Deposits
Ownership Categories That Reset the Limit
Each ownership category is a fresh $250,000 slot at the same bank. The FDIC recognizes roughly the same set of categories the NCUA does.
Single Accounts
Any deposit owned by one person with no beneficiaries named. The FDIC combines all of your single accounts at one bank and insures the total up to $250,000. Accounts under a sole proprietorship’s DBA name count as your single accounts too, not as a separate business category, which catches people off guard.6FDIC.gov. Single Accounts
Joint Accounts
Accounts owned by two or more people with equal withdrawal rights. Each co-owner gets $250,000 of coverage, so a two-person joint account is insured up to $500,000. The FDIC assumes ownership is split equally unless the account records say otherwise.5FDIC.gov. Your Insured Deposits
Certain Retirement Accounts
Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs held at a bank as deposit products form their own category. All qualifying retirement deposits are added together and insured up to $250,000 per person at the same bank, on top of any single-account coverage.5FDIC.gov. Your Insured Deposits
Trust Accounts
Effective April 1, 2024, the FDIC merged payable-on-death accounts, formal revocable trusts, and irrevocable trusts into one “trust accounts” category. Coverage is $250,000 per unique beneficiary, capped at $1,250,000 per owner at the same bank.7FDIC: Electronic Deposit Insurance Estimator (EDIE): SOC. Changes in FDIC Deposit Insurance Coverage The math runs cleanly by beneficiary count:
- 1 beneficiary: $250,000
- 2 beneficiaries: $500,000
- 3 beneficiaries: $750,000
- 4 beneficiaries: $1,000,000
- 5 or more beneficiaries: $1,250,000
Under the old rules, a trust with more than five beneficiaries could receive unlimited per-beneficiary coverage. If you built a trust structure around that, your total coverage at a single bank may now be lower than it used to be, and it is worth recalculating.
Business and Organization Accounts
Corporations, partnerships, and unincorporated associations each get their own $250,000, separate from the personal accounts of the owners. The entity must be engaged in an “independent activity” for a legitimate business purpose. Separately incorporated subsidiaries each get their own coverage; unincorporated divisions of the same corporation do not. Multiple accounts held by the same entity at the same bank are combined into a single $250,000 limit.8FDIC.gov. Corporation, Partnership and Unincorporated Association Accounts
Employee Benefit Plan and Government Accounts
Non-self-directed benefit plans qualify for pass-through coverage, with each participant’s interest insured up to $250,000 individually rather than the plan being capped at $250,000 in total.5FDIC.gov. Your Insured Deposits Public unit accounts held by state, county, municipal, or tribal governments have their own set of rules, with in-state time and savings deposits insured up to $250,000 and in-state demand deposits insured separately up to another $250,000 per official custodian.9FDIC.gov. Government Accounts
What Stacking Looks Like
A married couple at one bank can hold $250,000 in each spouse’s single accounts, up to $500,000 jointly, $250,000 in each spouse’s IRA, and additional amounts in trust accounts depending on beneficiaries. Well over $1.5 million is achievable at one institution before anyone opens an account elsewhere.
What’s Covered and What Isn’t
Deposit insurance protects products where the bank promises to return your principal. The covered list is short:
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit
Anything else a bank might sell you falls outside deposit insurance. Stocks, bonds, mutual funds, life insurance policies, annuities, and municipal securities are not covered, even when purchased at a bank branch. Treasury securities are backed directly by the federal government through the Bureau of the Fiscal Service, not by deposit insurance.10Federal Deposit Insurance Corporation (FDIC). Deposit Insurance
Cryptocurrency deserves its own line. Crypto assets are not deposits and are not insured, no matter where you bought them or who holds them. The FDIC has issued cease-and-desist letters to companies claiming otherwise.11FDIC.gov. Advisory to FDIC-Insured Institutions Regarding FDIC Deposit Insurance and Crypto Assets When a fintech company advertises “FDIC insurance” alongside a crypto product, the insurance almost always refers to a cash balance sitting at a partner bank, not the crypto itself.
What Happens to Money Over the Limit
Federal law requires the FDIC to pay insured deposits as soon as possible after a bank closes, and the FDIC’s target is within two business days. Depositors typically either receive a check or have their account transferred to a bank that acquires the failed institution’s deposits.12FDIC.gov. Payment to Depositors
Balances above $250,000 in the same ownership category are handled differently. Those uninsured amounts become unsecured claims against the failed bank’s remaining assets. The FDIC may pay an advance dividend based on estimated recovery, but the remaining balance depends on what the bank’s assets actually sell for, and full recovery is not guaranteed.13eCFR. 12 CFR Part 360 – Resolution and Receivership Rules A $400,000 single account at one bank produces $250,000 promptly and a $150,000 claim in a liquidation process that can run for months or years.
Protecting Balances Above $250,000
Stacking ownership categories is the most common approach. A single person can layer a single account, an IRA, and a trust account with one beneficiary to reach $750,000 in coverage at one bank. Adding a joint account with a spouse raises the ceiling further.
For larger balances, reciprocal deposit networks let you get multi-million-dollar FDIC coverage while dealing with only one bank. Services like IntraFi’s ICS and CDARS split a large deposit into increments below $250,000 and place each increment at a different insured bank in the network. Your bank handles the paperwork and you receive a single statement.14IntraFi. ICS and CDARS These arrangements qualify for pass-through insurance as long as the deposits at each receiving bank are properly titled with records identifying the actual owner.15FDIC.gov. Pass-through Deposit Insurance Coverage Not every bank participates, so ask.
Fintech Apps and Neobanks
Online-only banks that hold their own FDIC charter work exactly like brick-and-mortar banks for insurance purposes. Coverage runs to $250,000 per ownership category whether you visit a branch or use a phone. What matters is whether the institution itself carries the charter.16FDIC.gov. Banking With Apps
Fintech apps and neobanks are different. These companies are not banks and are not themselves FDIC-insured. Some partner with insured banks that hold customer funds, which can provide pass-through coverage if the money actually reaches an insured bank and the records identify you as the owner. Funds sitting inside a fintech company’s own accounts before being placed at a bank are not insured at all. If the fintech fails before depositing your money, FDIC insurance does not help you.16FDIC.gov. Banking With Apps Confirm which specific insured bank holds your funds and verify that bank’s status independently.
Bank Mergers and the Six-Month Grace Period
When one bank acquires another, customers who held accounts at both institutions can suddenly find themselves over the limit at a single bank. Federal regulations provide a six-month grace period. During that window, deposits acquired from the old bank are insured separately from accounts you already had at the acquiring bank. CDs that mature during the grace period and are renewed for the same amount and term stay separately insured until their next maturity date after the six months expire.17FDIC. Financial Institution Employee’s Guide to Deposit Insurance – Merger of IDIs If you receive a merger notice, run the numbers and move money before the grace period ends.
Verifying Coverage and Running Your Own Numbers
Every FDIC-insured bank displays a “Member FDIC” sign. Credit unions display “NCUA Insured” or “Your savings federally insured to at least $250,000.” Signs can be faked, so independent verification is worth thirty seconds. The FDIC’s BankFind tool confirms whether an institution currently carries deposit insurance.18Federal Deposit Insurance Corporation (FDIC). BankFind Suite – Find Insured Banks The NCUA’s locator does the same for credit unions.19National Credit Union Administration. National Credit Union Administration – Credit Union Locator
For accounts spread across multiple ownership categories, the FDIC’s Electronic Deposit Insurance Estimator calculates your exact coverage at a given bank.20Federal Deposit Insurance Corporation (FDIC). FDIC Electronic Deposit Insurance Estimator (EDIE) Calculator The NCUA offers a Share Insurance Estimator for credit union accounts.21MyCreditUnion.gov. Share Insurance Estimator Running your balances through one of these once a year keeps you from drifting over the line without noticing.