Jeffrey Wade
If you have more than $250,000 in the bank, you may want to ensure your funds are protected. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per institution, and per ownership category at member banks. This means that if you have accounts in different ownership categories (such as individual, joint, and retirement accounts), each category is insured up to $250,000 in case the institution fails. However, if you have more than this amount, there are several options to consider.
| Characteristics | Values |
|---|---|
| Amount insured by the Federal Deposit Insurance Corporation (FDIC) | $250,000 per depositor, per institution and per ownership category |
| FDIC-insured accounts | Checking and savings accounts, money market accounts, certificates of deposit (CDs), negotiable order of withdrawal (NOW) accounts, cashier's checks, money orders |
| Accounts not covered by FDIC insurance | Stock and bond investments, mutual funds, life insurance policies, annuities, municipal securities, safe deposit boxes (and their contents), Treasury bills, bonds and notes, cryptocurrencies |
| FDIC insurance verification | FDIC's Electronic Deposit Insurance Estimator (EDIE) or call 877-ASK-FDIC (877-275-3342) |
| Insuring deposits over $250,000 | Open accounts at multiple FDIC-insured institutions, use IntraFi Network Deposits or Impact Deposits Corp., open a brokerage deposit account, use reciprocal deposit networks, use Depositors Insurance Fund (DIF) for Massachusetts-chartered banks |
| Securities Investor Protection Corp. insurance | Up to $500,000 with a $250,000 limit for cash |
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What You'll Learn
Open a second account at an FDIC member bank
If you have more than $250,000 in the bank, you may be wondering how to ensure your money is protected. The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per institution, and per ownership category at member banks. This includes checking and savings accounts, money market accounts, certificates of deposit (CDs), negotiable order of withdrawal (NOW) accounts, and cashier's checks or money orders issued by the bank.
One way to ensure your money above this limit is protected is to open a second account at another FDIC-member bank. This is a straightforward way to get another $250,000 insured. For example, if you have $300,000 in a savings account at one bank, the FDIC would insure the first $250,000, but the remaining $50,000 would be uninsured. By opening a new account at a different FDIC-insured institution, you can ensure that the remaining $50,000 is also protected.
It is important to note that having multiple accounts of the same type at one bank does not increase your coverage. For example, three savings accounts at the same bank would still have a collective limit of $250,000. However, by opening accounts at different FDIC-insured banks, you can increase your overall coverage.
Additionally, you can explore other strategies to maximize your FDIC coverage, such as utilizing multiple ownership categories or considering joint accounts, which have a higher insured limit of $500,000.
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Understand what the FDIC covers
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to a limit of $250,000 per depositor, per FDIC-insured bank, and per ownership category. FDIC deposit insurance covers checking and savings accounts, money market accounts, certificates of deposit (CDs), negotiable order of withdrawal (NOW) accounts, and cashier's checks or money orders issued by the bank. These accounts are covered for up to $250,000 per account holder, per ownership category.
FDIC deposit insurance does not cover non-deposit investment products, even those offered by FDIC-insured banks. It also doesn't cover default or bankruptcy of any non-FDIC-insured institution. Examples of accounts not covered include stock and bond investments, mutual funds, life insurance policies, annuities, municipal securities, safe deposit boxes (and their contents), and Treasury bills, bonds, and notes.
FDIC deposit insurance covers deposits in all types of accounts at FDIC-insured banks. To qualify for deposit insurance, member banks must follow certain liquidity and reserve requirements. The FDIC publishes a guide that sets forth the general characteristics of FDIC deposit insurance and addresses common questions asked by bank customers.
If you have more than $250,000 in a single account, only a portion of your money is protected. For example, if you have $300,000 in a savings account, the FDIC would immediately guarantee your first $250,000, but the remaining $50,000 would be considered uninsured. However, you may qualify for more than $250,000 in FDIC deposit insurance coverage if you deposit money into accounts that are in different ownership categories. For example, if you have a single ownership account at an FDIC-insured bank and a joint ownership account with one or more people at the same bank, you will be insured for up to $250,000 for your single ownership account deposits and separately for your ownership interest up to $250,000 for all of your joint ownership account deposits.
You can use the FDIC's online Electronic Deposit Insurance Estimator (EDIE) to calculate how much of your funds are covered by deposit insurance.
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Use a deposit network
If you have more than $250,000 in deposits, you may want to consider using a deposit network to ensure your money is adequately insured. Deposit networks allow you to take advantage of FDIC insurance across multiple banks without having to manage relationships with each one individually.
One such network is IntraFi Network Deposits, which works with thousands of banks to spread your money across multiple institutions, ensuring your deposits are adequately covered. This service works with checking accounts, money market accounts, and CDs. SoFi Bank, for example, provides up to $2 million in protection by automatically distributing deposits across its network of partner banks.
Another option is Impact Deposits Corp., which offers insurance protection through its network of almost 200 FDIC-insured community banks. Some financial institutions offer expanded FDIC insurance through their own partner bank networks. For instance, Wintrust Financial offers MaxSafe CD and money market accounts that share deposits across a family of 15 community banks, providing up to $3.75 million in FDIC coverage.
By using a deposit network, you can keep your money at one bank, and the program will automatically distribute your excess deposits across multiple institutions, ensuring your funds are protected. This approach offers a hands-off solution for those seeking to protect potentially millions in deposits without the hassle of managing multiple accounts.
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Open accounts in different ownership categories
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per FDIC-insured bank, and per ownership category. The ownership category refers to who owns the account, such as a single or joint account, and the account type.
You can open accounts in different ownership categories to insure your money over $250,000. Examples of ownership categories include single, joint, retirement account, trust, business, employee benefit plan, and government.
For example, let's say you have $5,000 in an individual checking account, $10,000 in individual savings, $200,000 in individual certificates of deposit (CDs), and an additional $100,000 in a money market account held in a revocable trust. Your $315,000 in account balances is entirely covered under FDIC insurance because your money is split between two account ownership types—individual (single) and revocable trust.
Additionally, if you have a joint account with a co-owner, your joint account is insured up to $500,000 ($250,000 each for you and your co-owner).
By maintaining accounts in multiple ownership categories, you can increase your FDIC insurance coverage and ensure your money is protected.
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Open a brokerage deposit account
If you have more than $250,000 in the bank, you may want to consider opening a brokerage deposit account. Brokerage accounts are investment accounts that allow you to buy and sell a variety of investments, such as stocks, bonds, mutual funds, and exchange-traded funds (ETFs). These accounts are not FDIC-insured, but some, like Vanguard Brokerage Accounts, are protected by Securities Investor Protection Corporation (SIPC) insurance, which covers up to $500,000 in securities and up to $250,000 in cash if the firm fails.
When opening a brokerage deposit account, you'll typically need to provide your name, address, date of birth, and other identifying information. You may also need to provide a copy of your driver's license or other identifying documents. There is usually no fee to open a brokerage account, and many firms do not require an upfront deposit or account minimum. However, some mutual funds and other investments may require a minimum investment of $1,000 or more.
Once your account is open, you can transfer funds electronically, by check, or wire transfer, or you can consolidate your assets by transferring an entire brokerage account from another firm. After your account is funded, you can start investing. It's important to remember that any money you transfer or investments you purchase are yours, and you are free to sell your investments at any time.
If you're considering opening a brokerage deposit account to insure your money, be sure to research the specific requirements and protections offered by the firm you're interested in working with. Additionally, keep in mind that brokerage accounts hold investments, which come with their own set of risks, including market, liquidity, and inflation risks, among others.
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Frequently asked questions
The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per institution, and per ownership category.
FDIC insurance does not cover investment products like stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, safe deposit boxes, or cryptocurrencies.
There are several options for insuring more than $250,000. You can open multiple accounts at different FDIC-insured banks, use a network like IntraFi that spreads your money across multiple banks, or open a brokerage deposit account.
