Are All Bank Accounts Insured by the FDIC? (2024)

When you open a bank account, you expect the money you deposit to be safe. However, these accounts don't work as a personal vault, which means your money doesn't just sit around waiting for you to make a withdrawal when you need access to it. Banks usually keep a certain amount of cash on hand but the majority of your money is lent out to others.

When banks can't keep up with the demand for withdrawals, they may have to turn depositors away. When more customers want their money and can't get it, they end up losing confidence, resulting in a panic. This, in turn, can trigger a domino effect, leading to a failure in the banking system, which the U.S. experienced during the Great Depression.

Key Takeaways

  • The Federal Deposit Insurance Corp. (FDIC) protects consumers against loss, up to a certain amount, if their bank or thrift institution fails.
  • Not all banking institutions are insured by the FDIC.
  • Eligible bank accounts are insured up to $250,000 for principal and interest.
  • The FDIC doesn't insure share accounts at credit unions.

What Does it Mean to Be FDIC-Insured?

The Federal Deposit Insurance Corp. (FDIC) is an independent agency of the U.S. government that protects you against loss of deposit if your bank or thrift institution fails and is FDIC-insured. To keep public confidence, the federal government created the agency during the Depression in 1933.

So, if you have money in an FDIC-insured bank account and the bank fails, the agency reimburses you for any losses you incur.

Many banks use the fact that they're insured as a selling point, even though it isn't a mandate. In other words, an uninsured bank can't compete effectively in an industry where consumers expect their money to be protected. To see if your bank is FDIC-insured, check out the FDIC Bank Find Suite page.

What Is Covered?

The FDIC doesn't insure all accounts. Insured accounts include negotiable orders of withdrawal (NOW), money marketdeposit accounts (MMDA), checking and savings accounts, and certificates of deposit (CD). FDIC insurance covers the principal and interest of an account, not exceeding the $250,000 limit. For a list of the types of accounts and how they are covered, see the chart below.

What and How Much Is Covered?
Single Account$250,000 per owner
Certain Retirement Account$250,000 per owner
Joint Account$250,000 per co-owner
Revocable TrustOwner is insured $250,000 per beneficiary
Irrevocable Trust$250,000 for the trust; additional coverage is available under specific conditions.
Employee Benefit Plan$250,000 for the noncontingent interest of participants
Corporation, Partnership, or Unincorporated Association Account$250,000 per entity
Government Account$250,000 per custodian

If you have a savings account with a balance of $50,000 and a CD with a $150,000, both accounts are insured, as they fall under $250,000. If you and your spouse have a joint account with a $250,000 balance and $200,000 in another eligible account, both accounts are covered, as their combined value falls under the $250,000 per co-owner rule.

What Isn't Covered

The FDIC doesn't cover all types of accounts. Financial instruments, such as stocks, bonds, money market funds, cryptocurrency, U.S. Treasury securities (T-bills), safe deposit boxes, annuities, and insurance products aren't insured by the FDIC.

The FDIC doesn't insure stocks, bonds, cryptocurrency, money market funds, U.S. Treasury securities, safe deposit boxes, annuities, or insurance products.

The FDIC also doesn't insure regular shares and share draft accounts of credit unions. Similar to the FDIC, the National Credit Union Share Insurance Fund, administered by the National Credit Union Administration (NCUA), insures accounts at credit unions.

The Advisor Insight

Jeff Rose, CFP®
Good Financial Cents, Nashville, TN

In general, nearly all banks carry FDIC insurance for their depositors. However, there are two limitations to that coverage. The first is that only depository accounts, such as checking, savings, bank money market accounts, and CDs, are covered.

The second is that FDIC insurance is limited to $250,000 per depositor, per bank. That means if you have $500,000 sitting in one bank, only half of the money is insured.

The way to get around this limitation is to spread your money across more than one bank. If you have $500,000 held in a bank account, you can put $250,000 in one bank and $250,000 in another one. But coverage isn't segregated by branches within the same banking institution, so remember that both banks need to be completely unrelated.

What Is the FDIC?

The Federal Deposit Insurance Corp. (FDIC) guarantees bank customers against loss, up to a certain amount, if their bank or thrift institution fails.

To What Amount Does the FDIC Insure Bank Accounts and Some Other Financial Products?

Qualifying bank accounts are insured up to $250,000 for principal and interest. The agency also insures accounts such as negotiable orders of withdrawal (NOW), money marketdeposit accounts (MMDA), checking and savings accounts, and certificates of deposit (CD).

Does the FDIC Insure Deposits at Credit Unions?

No, the FDIC doesn't insure regular shares and share draft accounts held at credit unions. Instead, the National Credit Union Share Insurance Fund, run by the National Credit Union Administration (NCUA), insures credit union accounts.

Are All Bank Accounts Insured by the FDIC? (1)

The Bottom Line

The FDIC protects bank account holders against loss, up to a certain amount, if their bank or thrift institution fails. However, not all banking institutions or types of financial accounts are insured by the FDIC. Eligible bank accounts are insured up to $250,000 for principal and interest. Usually, banks will advertise this protection for their customers, or you can ask a banker when considering opening a new account. If your money is deposited in a credit union, be aware that the FDIC doesn't insure those accounts, but they are covered by the NCUA.

Article Sources

Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.

  1. Federal Deposit Insurance Corporation. "History of the FDIC."

  2. Federal Deposit Insurance Corp. "Understanding Deposit Insurance."

  3. Federal Deposit Insurance Corp. "Your Insured Deposits."

  4. National Credit Union Association. "Share Insurance."

Are All Bank Accounts Insured by the FDIC? (2024)

FAQs

Are All Bank Accounts Insured by the FDIC? ›

Q: Is every financial product at a bank covered by the FDIC? A: No. FDIC deposit insurance only covers certain deposit products, such as checking and savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs).

Are all bank accounts insured by FDIC? ›

In general, nearly all banks carry FDIC insurance for their depositors. However, there are two limitations to that coverage. The first is that only depository accounts, such as checking, savings, bank money market accounts, and CDs, are covered.

Is it safe to have more than $250000 in a bank account? ›

An account that contains more than $250,000 at one bank, or multiple accounts with the same owner or owners, is insured only up to $250,000. The protection does not come from taxes or congressional funding. Instead, banks pay into the insurance system, and the insurance provides their customers with protection.

What deposits are not insured by FDIC? ›

These include:
  • Stock Investments.
  • Bond Investments.
  • Mutual Funds.
  • Crypto Assets.
  • Life Insurance Policies.
  • Annuities.
  • Municipal Securities.
  • Safe Deposit Boxes or their contents.

Where do millionaires keep their money if banks only insure 250k? ›

Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.

Which type of bank account is not insured? ›

FDIC insurance limits cap at $250,000. The FDIC insures certificates of deposit and money market accounts, along with traditional checking and savings accounts. Some items that are not FDIC-insured include mutual funds, safe deposit box contents, annuities, and others.

Can the government take money from your bank account in a crisis? ›

The government can seize money from your checking account only in specific circ*mstances and with due process. The most common reason for the government to seize funds from your account is to collect unpaid taxes, such as federal taxes, state taxes, or child support payments.

Can banks seize your money if the economy fails? ›

It indicates an expandable section or menu, or sometimes previous / next navigation options. Your money is safe in a bank, even during an economic decline like a recession. Up to $250,000 per depositor, per account ownership category, is protected by the FDIC or NCUA at a federally insured financial institution.

Is it smarter to have more than 250000 in one bank? ›

Bottom line. Any individual or entity that has more than $250,000 in deposits at an FDIC-insured bank should see to it that all monies are federally insured. It's not only diligent savers and high-net-worth individuals who might need extra FDIC coverage.

How much money is too much to keep in one bank? ›

How much is too much savings? Keeping too much of your money in savings could mean missing out on the chance to earn higher returns elsewhere. It's also important to keep FDIC limits in mind. Anything over $250,000 in savings may not be protected in the rare event that your bank fails.

Should you have multiple bank accounts for FDIC? ›

The FDIC refers to these different categories as “ownership categories.” This means that a bank customer who has multiple accounts may qualify for more than $250,000 in insurance coverage, if the customer's funds are deposited in different ownership categories and the requirements for each ownership category are met.

Does FDIC cover two accounts at the same bank? ›

The FDIC adds together all single accounts owned by the same person at the same bank and insures the total up to $250,000.

What are three things not insured by FDIC? ›

The FDIC does not insure:
  • Stock Investments.
  • Bond Investments.
  • Mutual Funds.
  • Crypto Assets.
  • Life Insurance Policies.
  • Annuities.
  • Municipal Securities.
  • Safe Deposit Boxes or their contents.

What bank do most millionaires use? ›

The Most Popular Banks for Millionaires
  1. JP Morgan Private Bank. “J.P. Morgan Private Bank is known for its investment services, which makes them a great option for those with millionaire status,” Kullberg said. ...
  2. Bank of America Private Bank. ...
  3. Citi Private Bank. ...
  4. Chase Private Client.
Jan 29, 2024

Does adding a beneficiary to a bank account increase FDIC insurance? ›

Note on Beneficiaries: While some self-directed retirement Accounts, like IRAs, permit the owner to name one or more beneficiaries, the existence of beneficiaries does not increase the available insurance coverage.

Why don't millionaires worry about FDIC? ›

At the end of the business day, the private bank, as custodian of their various accounts, sells off enough liquid assets to settle up for that day. Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank.

Does FDIC cover $500,000 on a joint account? ›

This is their only account at this IDI and it is held as a “joint account with right of survivorship.” While they are both alive, they are fully insured for up to $500,000 under the joint account category.

Which of the 4 types of bank accounts are insured by the FDIC? ›

FDIC deposit insurance protects money you hold at an FDIC-insured bank in traditional deposit accounts like:
  • Checking Accounts,
  • Savings Accounts,
  • Money Market Deposit Accounts (MMDAs), and.
  • Certificates of Deposit (CDs).

What is the difference between member FDIC and FDIC insured? ›

I think customer might be confused between FDIC member bank (FDIC insured) and Federal Reserve non-member bank (nothing to do with FDIC or with insurance). The FDIC's own advertising regulations specify that an FDIC insured bank can use the phrase "Member FDIC" in ads to indicate that deposits are insured.

How do I insure $2 million in the bank? ›

Here are seven of the best ways to insure excess deposits that you may have.
  1. Understand FDIC limits. ...
  2. Use bank networks to maximize coverage. ...
  3. Open accounts with different ownership categories. ...
  4. Open accounts at several banks. ...
  5. Consider brokerage accounts. ...
  6. Deposit excess funds at a credit union.
Feb 29, 2024

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