Alyssa Lane
When it comes to insuring your bank account, it's important to understand the role of the Federal Deposit Insurance Corporation (FDIC). The FDIC provides deposit insurance, which protects your money in the event that an FDIC-insured bank fails. This insurance is automatic and free for any deposit account opened at an FDIC-insured bank, up to a standard limit of $250,000 per depositor, per bank, and per ownership category. This limit can be exceeded in certain situations, such as joint accounts, which are insured for up to $500,000. To confirm if a bank is FDIC-insured, you can use the FDIC's BankFind tool or look for the FDIC sign at your bank. Additionally, the IntraFi Network Deposits program allows you to insure millions of dollars by keeping your money at one bank that is part of the IntraFi Network, which then funnels your money into deposit accounts at other network banks. It's important to note that not all financial products at a bank are covered by FDIC insurance, and you should be cautious when considering non-deposit investment products.
| Characteristics | Values |
|---|---|
| FDIC insurance limit per depositor per bank | $250,000 |
| FDIC insurance limit for joint accounts | $500,000 |
| FDIC insurance limit for beneficiary-added joint accounts | $750,000 |
| FDIC insurance limit for IntraFi Network Deposits | $5,000,000 |
| Deposit insurance coverage | Checking, savings, money market, and certificate of deposit accounts |
| Deposit insurance applicability | Principal and accrued interest |
| Deposit insurance applicability | Revocable and irrevocable trust accounts |
| Deposit insurance applicability | Retirement accounts, including IRAs |
| Deposit insurance applicability | Corporation, partnership, and unincorporated association accounts |
| Deposit insurance applicability | Employee benefit plan accounts |
| Deposit insurance applicability | Government accounts |
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What You'll Learn
FDIC insurance covers deposits up to $250,000 per depositor, per bank
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects bank depositors against the loss of their insured deposits in the event that an FDIC-insured bank or savings association fails. FDIC insurance covers deposits in all types of accounts at FDIC-insured banks, including checking, savings, and money market accounts. It does not cover non-deposit investment products, even those offered by FDIC-insured banks. The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category. This means that if you have multiple accounts at the same bank with different ownership categories, such as a single ownership account and a joint ownership account, each category will be insured up to $250,000. For example, if you have a single ownership account with $250,000 and a joint ownership account with one or more people with $250,000 at the same bank, both accounts will be fully insured.
It's important to note that FDIC insurance only applies to deposits and does not cover investments. Additionally, FDIC insurance is only available at member banks, and it's important to confirm that your bank is FDIC-insured. You can do this by asking a bank representative, looking for the FDIC sign at your bank, or using the FDIC's BankFind tool on their website.
If you have deposits exceeding $250,000, there are options to ensure your funds are still protected. One option is to open accounts at multiple banks, ensuring that your deposits at each bank do not exceed $250,000. Alternatively, you can explore the IntraFi Network Deposits program, which allows you to get FDIC insurance on millions of dollars by keeping your money at one bank that is part of the IntraFi Network. This program will funnel your money into deposit accounts of your choice at other network banks, ensuring your funds remain insured.
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Joint accounts are insured up to $500,000
The Federal Deposit Insurance Corporation (FDIC) was founded in 1933 to protect your money in deposit accounts at FDIC-insured banks and savings associations in the event of a failure. FDIC insurance coverage applies to several ownership categories, including single accounts (owned by one person) and joint accounts (owned by more than one person).
Single, individually-owned accounts are insured up to $250,000 total at FDIC-member banks. However, joint accounts are insured up to $500,000 total. So, to double the insured amount in deposit accounts at a single bank, you can add another owner.
The National Credit Union Share Insurance Fund also insures up to $250,000 per person, per institution, per ownership category at credit unions that have National Credit Union Administration membership.
The IntraFi Network Deposits program allows you to get FDIC insurance on millions of dollars through a network of financial institutions without having to open accounts at multiple banks. Instead, you can keep all your money at one bank, and as long as that bank is part of the IntraFi Network, the program will funnel your money into deposit accounts of your choice at other network banks.
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IntraFi Network Deposits allow FDIC insurance on millions of dollars
IntraFi Network Deposits, formerly known as the Certificate of Deposit Account Registry Service (CDARS), allow large depositors to gain multi-million-dollar FDIC insurance on their funds. FDIC insurance coverage is normally limited to $250,000 per depositor per bank. IntraFi Network Deposits allow customers to access FDIC insurance on millions of dollars by placing their funds in multiple accounts across a network of FDIC-insured banks. This allows customers to keep their money in a single account at one bank while still benefiting from FDIC insurance on large deposits.
IntraFi Network Deposits work by dividing a large deposit into amounts under the standard FDIC insurance maximum of $250,000 and placing these in deposit accounts at other network banks, all accessible through the customer's primary bank. This allows customers to consolidate their deposits at a single banking institution, eliminating the need to manage multiple accounts at different banks. IntraFi has received endorsements from the American Bankers Association (ABA) and various state-level banking associations.
The FDIC has acknowledged that deposit placement services can be used to access expanded deposit insurance coverage. IntraFi's services have been tested with thousands of depositors and billions of dollars over the years, and no depositor has ever lost FDIC-insured funds through IntraFi. IntraFi's network includes more than 3,000 financial institutions, and the company has received an exclusive endorsement from the American Bankers Association.
While IntraFi Network Deposits can provide FDIC insurance on millions of dollars, it's important to note that no investment can be guaranteed as 100% safe in all situations. Additionally, using IntraFi's services may result in a lower interest rate on CDs, and customers may experience some loss of control over the management of their money.
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Non-deposit investment products are not insured by the FDIC
When considering non-deposit investment products, it is essential to understand the risks involved. These products are not subject to the same protections as traditional deposit accounts, such as checking or savings accounts. The FDIC does not insure them, even if they are purchased from an FDIC-insured bank. Therefore, if the financial institution offering these products fails, you could lose your investment.
To ensure you are making an informed decision, carefully review the disclosures provided by the sales representatives. They are required to disclose orally and in writing whether the product is covered by FDIC insurance. Statements such as "this product is not a deposit or other obligation of, or guaranteed by, the bank" indicate that the product is not FDIC-insured.
It is also important to consider your financial goals, risk tolerance, and other factors when investing in non-deposit products. While these investments may offer the potential for higher returns, they also carry a higher risk. If you are concerned about protecting your money, you may want to work with a financial advisor or broker to find investment products that suit your risk profile and financial objectives.
Additionally, it is worth noting that some non-deposit investment products, such as U.S. Treasury Bills, Bonds, or Notes, are backed by the full faith and credit of the U.S. government. While they are not FDIC-insured, they do carry the guarantee of the U.S. government.
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FDIC insurance covers both deposits and interest earned
The FDIC responds promptly when a bank fails, either by providing customers of the failed bank with new accounts at another insured bank or by issuing checks for the insured balances. FDIC insurance covers dollar-for-dollar, including the principal amount deposited and any accrued interest, ensuring that depositors do not lose their insured funds. It is important to note that FDIC insurance does not cover investments, even if they were purchased at an insured bank.
To maximize FDIC insurance coverage, individuals can open multiple accounts across different FDIC-insured banks or utilize joint accounts, which have a higher insurance limit of $500,000. Additionally, certain types of accounts, such as trust accounts, may qualify for higher insurance limits, depending on the number of beneficiaries. By understanding the ownership categories and insurance limits, individuals can effectively insure their bank deposits and interest earned through FDIC-insured banks.
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Frequently asked questions
You can ask a bank representative, look for the FDIC sign at your bank, or use the FDIC's BankFind tool.
The standard deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category. However, joint accounts are insured for up to $500,000.
No, deposit insurance is automatic for any deposit account opened at an FDIC-insured bank.
FDIC deposit insurance covers certain deposit products, such as checking and savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs).
