Alyssa Lane
The Federal Deposit Insurance Corporation (FDIC) insures up to $250,000 per depositor, per FDIC-insured bank, per ownership category. This means that if you have under $250,000 in a bank account, you are fully insured, and your money is protected even if your bank fails. 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 guarantee your first $250,000, but the remaining $50,000 would be considered uninsured.
| Characteristics | Values |
|---|---|
| Insurer | Federal Deposit Insurance Corporation (FDIC) |
| Insured amount | $250,000 |
| Insured amount for joint accounts | $500,000 ($250,000 each for co-owners) |
| Insured amount for trust accounts | $250,000 per eligible beneficiary |
| Insured amount for securities held in investment accounts | $500,000 with a $250,000 limit for cash |
| Insured amount for business accounts | $250,000 |
| Conditions | Per depositor, per FDIC-insured bank, per ownership category |
| Eligible accounts | Checking, savings, money market, certificates of deposit (CDs), negotiable order of withdrawal (NOW), cashier's checks, money orders |
| Ineligible accounts | Stock, bond investments, mutual funds, life insurance policies, annuities, municipal securities, safe deposit boxes, Treasury bills |
| Other options for higher insured amounts | Open accounts at more than one institution, use a deposit network, add an account holder |
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What You'll Learn
FDIC insurance covers checking and savings accounts
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to a limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. This helps ensure your money is protected even if your bank fails. FDIC insurance covers deposit accounts, such as checking and savings accounts, money market deposit accounts, and certificates of deposit.
FDIC insurance covers several ownership categories: single accounts (owned by one person), joint accounts (owned by more than one person), certain retirement accounts, revocable trust accounts, irrevocable trust accounts, corporation, partnership, and unincorporated association accounts, employee benefit plan accounts, and government accounts.
FDIC insurance does not cover investment options, such as stocks, bonds, and mutual funds, even if they were purchased through an insured bank. It also doesn't cover cryptocurrencies, the contents of safe deposit boxes, life insurance policies, annuities, or municipal securities.
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 guarantee your first $250,000, but the remaining $50,000 would be considered uninsured.
There are ways to insure amounts over the FDIC limit. One way is to open accounts at more than one institution or use a deposit network. For example, a married couple could structure their accounts to insure $1 million at a single bank by having individual accounts in each spouse's name, each insured up to $250,000. They could also set up a joint account, which would be insured up to $500,000. Another way to insure excess deposits is to use a network like IntraFi Network Deposits, which works with thousands of banks and will spread your money across multiple banks to ensure adequate coverage.
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![Federal Deposit Insurance Act: [As Amended Through P.L. 117–263, Enacted December 23, 2022]](https://m.media-amazon.com/images/I/517mroyL3UL._AC_UY218_.jpg)
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Joint accounts are insured up to $500,000
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to a limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. This helps ensure your money is protected even if your bank fails. The FDIC insures traditional deposit products, including checking accounts, savings accounts, and money market accounts.
However, FDIC insurance does not cover investment products like stocks, bonds, mutual funds, cryptocurrencies, the contents of safe deposit boxes, life insurance policies, annuities, or municipal securities. To insure these types of assets, you would need to purchase additional insurance or work with a financial advisor to structure your investments appropriately.
If you have more than $250,000 in a single account, only a portion of your money is protected by the FDIC. For example, if you have $300,000 in a savings account, the FDIC would insure the first $250,000, but the remaining $50,000 would be considered uninsured. In this case, you may want to consider opening a second account at another FDIC-insured bank to ensure your funds are fully protected.
Now, let's discuss joint accounts. Joint accounts are insured up to $500,000 total. So, if you have a joint account with someone else, both of you will be insured up to $250,000 each. This is a great way for couples or business partners to ensure their funds are protected. For example, a married couple could structure their accounts to insure $500,000 in a joint account and an additional $500,000 in individual accounts at a single bank, for a total of $1 million in insured deposits.
Additionally, there are other ways to insure excess deposits beyond the $250,000 limit. One way is to use a deposit network like IntraFi Network Deposits, which spreads your money across multiple banks to ensure adequate coverage. Another option is to set up a trust and name beneficiaries who would receive the money upon your death. Each beneficiary named adds another $250,000 in coverage. You can also open accounts at separately chartered banks to expand your FDIC coverage or consider credit unions, which offer similar insurance through the National Credit Union Share Insurance Fund.
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Insure more by opening accounts at multiple institutions
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. This helps ensure your money is protected even if your bank fails. However, if you have more than $250,000 in a single account, only a portion of your money is protected.
One way to insure more than the $250,000 limit is to open accounts at multiple institutions. This strategy works as long as the institutions are distinct. To confirm this, check their FDIC certificate numbers, which are unique to each bank.
For example, a married couple could structure their accounts to insure $1 million at a single bank: an individual account in one spouse's name with $250,000, and an individual account in the other spouse's name with $250,000.
Another way to insure more than $250,000 is to use a deposit network. Networks are designed to help depositors insure large sums. IntraFi Network Deposits, for instance, will spread your money across multiple banks to ensure you're adequately covered. This service works with checking accounts, money market accounts, and certificates of deposit.
Additionally, you can open accounts in different ownership categories, such as joint accounts or trusts, to increase FDIC insurance coverage. Each ownership category receives its own $250,000 insurance limit. For instance, you could set up a trust and name beneficiaries who would receive the money upon your death. Each beneficiary you name adds another $250,000 in coverage.
Finally, you can open a brokerage deposit account. Most large brokerage companies offer FDIC-insured bank accounts. An FDIC brokerage cash account will keep your money federally insured, and since it's linked with a brokerage house, you can easily execute trades into the market. The Securities Investor Protection Corp. insures securities held in investment accounts up to $500,000 with a $250,000 limit for cash.
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FDIC insurance does not cover stocks or mutual funds
The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per insured bank, and per ownership category. This limit has been unchanged for over a decade. The FDIC only insures deposits, such as checking accounts, savings accounts, money market deposit accounts, and certificates of deposit (CDs).
FDIC insurance does not cover investment products like stocks, bond markets, mutual funds, annuities, life insurance policies, and Treasury securities. Mutual funds are ineligible for FDIC insurance because they are not considered deposits but rather investment vehicles, which carry some risk of losing money. Even stocks, bonds, or other vehicles purchased through a bank's investment department are not insured.
It is important to note that money market mutual funds are different from money market deposit accounts. While the former carries a risk of losing your original investment, the latter generates interest without any risk to your deposited funds.
If you are looking to insure more than the FDIC limit, you can consider opening accounts at more than one institution or using a deposit network. Some financial institutions offer expanded FDIC insurance through their partner bank networks. For example, SoFi Bank provides up to $2 million in protection by distributing deposits across its network of partner banks.
Additionally, the Securities Investor Protection Corporation (SIPC) is a non-government entity that protects investors from losses if their brokerage firm fails. It replaces missing stocks and other securities in customer accounts held by its members up to $500,000, including up to $250,000 in cash.
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Deposit insurance protects your money if your bank fails
Deposit insurance is a safety net that ensures your money is protected in the event of your bank failing. The Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor, per ownership category, and per FDIC-insured bank. This limit has been in place for over a decade and applies to most savings and checking accounts, as well as other types of deposit accounts. FDIC insurance does not cover investment products like stocks, bonds, mutual funds, cryptocurrencies, or the contents of safe deposit boxes.
If you have multiple accounts at the same bank, they will share the $250,000 limit. However, if you have accounts in different ownership categories, such as a personal account and a business account, you can qualify for more than $250,000 in FDIC coverage. For example, a married couple could structure their accounts to insure up to $1 million at a single bank by having individual accounts in their respective names.
To insure funds over the FDIC limit, you can open accounts at multiple FDIC-insured banks or utilise deposit networks like IntraFi Network Deposits, which spread your money across multiple banks. Additionally, certain financial institutions offer expanded FDIC insurance through their partner bank networks. For instance, SoFi Bank provides up to $2 million in protection by distributing deposits across its partner banks.
It's important to note that FDIC insurance is automatic when you open an account at an FDIC-insured bank. Since its founding in 1933, no depositor has lost any FDIC-insured funds. The FDIC helps maintain stability and public confidence in the US financial system by insuring deposits and protecting depositors when banks fail.
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Frequently asked questions
The Federal Deposit Insurance Corporation (FDIC) insures funds up to $250,000 per account holder, insured bank and ownership category.
You can insure more than the limit by opening accounts at more than one institution or using a deposit network. For example, a married couple could structure their accounts to insure $1 million at a single bank: Individual account in spouse #1’s name: $250,000. Individual account in spouse #2’s name: $250,000.
FDIC 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.
