Your money in a savings account is protected up to $250,000 per depositor, per bank, through federal insurance

The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks. If your bank fails, the FDIC pays you back up to $250,000 for each account category you hold at that bank. This protection is automatic — you do not need to sign up or pay a fee. The FDIC has been backing this promise since 1933, and no depositor has lost a penny of insured funds in that time.

The $250,000 limit applies per depositor, per insured bank, per ownership category. If you have $250,000 in a savings account at Bank A and $250,000 in a savings account at Bank B, both are fully protected because they are at different banks. If you have $250,000 in a savings account and $250,000 in a money market account at the same bank, both are covered because they are different account categories. If you have $500,000 in one savings account at one bank, only $250,000 is insured.

Key Takeaways

  • The FDIC insures up to $250,000 per depositor at each bank, and this protection is automatic with no action required from you.
  • The $250,000 limit resets for each different bank you use, so spreading money across multiple banks increases your total protection.
  • Different account types at the same bank — such as a savings account and a money market account — are insured separately.
  • Joint accounts, retirement accounts, and trust accounts have their own $250,000 limits and are counted separately from your individual accounts.
  • Your money is not safe from theft, fraud, or your own mistakes — FDIC insurance only protects against bank failure.

How FDIC insurance works when a bank closes

When a bank fails, the FDIC steps in as the insurer. The agency either arranges for another bank to take over the failed bank's deposits, or it pays depositors directly. In most cases, you regain access to your money within a few business days. The FDIC maintains a reserve fund from insurance premiums paid by member banks, so the money comes from that pool, not from taxpayers.

You do not need to file a claim or contact the FDIC yourself. If your bank closes, the FDIC or the acquiring bank will contact you with instructions. Your account number, balance, and ownership type determine your coverage automatically. The FDIC's website includes a tool called the FDIC Electronic Deposit Insurance Estimator (EDIE) where you can enter your account details and see exactly how much is covered at your bank.

Account types that have separate insurance limits

The FDIC counts different account ownership categories separately, each with its own $250,000 limit at the same bank. A single account in your name alone is one category. A joint account you share with another person is a separate category with $250,000 coverage per co-owner. A retirement account (IRA, Roth IRA, SEP-IRA) is a third category with $250,000 coverage. A trust account is a fourth category.

This means you can have $250,000 in a savings account under your name, $250,000 in a joint savings account with your spouse, and $250,000 in an IRA at the same bank, and all three amounts are fully insured. The categories do not mix. If you have two separate IRAs at the same bank, they share the same $250,000 limit between them.

What FDIC insurance does not cover

FDIC insurance protects only against bank failure. It does not protect you if someone steals your debit card, hacks your online account, or convinces you to send money to a scammer. It does not cover losses from investment products like stocks, bonds, or mutual funds, even if you buy them through your bank. It does not cover safe deposit boxes or items stored in them.

If you lose money to fraud or theft, you have other protections — your bank's fraud liability policy, your debit card issuer's zero-liability rules, and sometimes your homeowner's or renter's insurance — but these are separate from FDIC insurance. Report fraud to your bank immediately and to the Federal Trade Commission at reportfraud.ftc.gov.

Banks that are not FDIC members

Most banks in the United States are FDIC members, but not all. Credit unions are insured by the National Credit Union Administration (NCUA), which offers the same $250,000 per depositor protection. Some online banks and niche financial institutions may not be members of either. Before opening an account, check the bank's website or call and ask whether it is FDIC or NCUA insured.

You can search the FDIC's Bank Find tool on its website by entering the bank's name or location. The tool shows you which banks in your area are insured and how much coverage you have at each one. If a bank is not listed, it is not FDIC insured, and your deposits there are not protected by federal insurance.

How to protect money beyond the $250,000 limit

If you have more than $250,000 to keep safe, spread it across multiple FDIC-insured banks. Open a savings account at Bank A with $250,000, a savings account at Bank B with $250,000, and so on. Each bank's account is insured separately. You can also use different account categories at the same bank — a single account, a joint account, and a retirement account — to increase your coverage without opening new banks.

Some people use a service called IntraFi Network Deposit Program (formerly Promontory Interbank Network), which automatically spreads your deposit across multiple banks while you maintain a single account interface. You deposit money into one account, and the service divides it among partner banks, each keeping your balance under $250,000 so all of it is insured. Ask your bank whether it offers this service.

Frequently Asked Questions

What happens to my savings account if my bank fails?

The FDIC either arranges for another bank to take over your account or pays you directly, up to $250,000. You usually regain access to your money within a few business days. You do not need to do anything — the FDIC handles it automatically.

Are online banks FDIC insured?

Most online banks are FDIC insured, but not all. Check the bank's website for the FDIC logo or call and ask. You can also search the FDIC's Bank Find tool to confirm. If a bank is FDIC insured, your deposits are protected the same way as at a traditional bank.

If I have $500,000 in one savings account, how much is protected?

Only $250,000 is insured. The remaining $250,000 is not protected by the FDIC. To protect all $500,000, split it between two different FDIC-insured banks, keeping $250,000 at each one.

Does FDIC insurance cover money I lose to a scammer?

No. FDIC insurance only protects against bank failure. If you send money to a scammer or someone steals your account information, report it to your bank and the Federal Trade Commission at reportfraud.ftc.gov. Your bank's fraud liability policy may cover some losses, but this is separate from FDIC insurance.

Are joint accounts insured separately from individual accounts?

Yes. A joint account is a separate category with its own $250,000 limit per co-owner. If you and your spouse each have $250,000 in a joint account at the same bank, the full $500,000 is insured because it is $250,000 per person in that category.