Your money is protected up to $250,000 per account owner at banks insured by the FDIC

The Federal Deposit Insurance Corporation (FDIC) guarantees that if your bank fails, you will not lose money in your savings account up to $250,000. This protection applies to each depositor at each bank separately. If you have $150,000 in savings at Bank A and $100,000 at Bank B, both amounts are fully protected because they are at different institutions.

The $250,000 limit is per person, per bank, per account category. If you are the sole owner of a savings account, that account is covered to $250,000. If you have a joint account with your spouse at the same bank, that joint account is covered separately to $250,000. A retirement account at the same bank is also covered separately to $250,000. The categories do not combine.

Not every bank carries FDIC insurance. Most do, but some online banks, credit unions, and specialty lenders do not. You can check whether your bank is FDIC-insured by searching the FDIC's Bank Find tool on their website, or by asking your bank directly. If your bank is not FDIC-insured, your deposits have no federal protection if the bank fails.

Key Takeaways

  • The FDIC protects up to $250,000 per depositor per bank, so money over that amount at a single bank is not protected.
  • Joint accounts, retirement accounts, and accounts in your name alone are each covered separately to $250,000 at the same bank.
  • You can verify your bank's FDIC insurance status using the FDIC Bank Find tool or by calling your bank.
  • If your bank fails, the FDIC pays out covered deposits directly to you; you do not need to file a claim.
  • Credit unions are insured by the NCUA, not the FDIC, and have the same $250,000 per account protection.

How the $250,000 limit works across multiple accounts

The $250,000 protection is tied to account ownership and category, not to the number of accounts you hold. If you have three separate savings accounts at the same FDIC bank, all three are added together and covered only to $250,000 total. If you have $100,000 in one savings account and $200,000 in another at the same bank, only $250,000 of the combined $300,000 is protected.

The exception is when accounts are in different categories. A savings account in your name alone, a joint savings account with your spouse, and a payable-on-death account naming your child are three separate categories at the same bank. Each is covered to $250,000. This is why some people with large amounts of money split deposits across multiple banks or use different account categories to stay within the protection limits.

Money market accounts and checking accounts are also covered by FDIC insurance under the same $250,000 limit per category. Certificates of deposit (CDs) are covered separately if they are in a different category. A CD in your name alone is protected separately from a savings account in your name alone at the same bank.

What the FDIC does not cover

FDIC insurance covers the balance in your account on the day your bank fails. It does not cover investment losses. If you bought stocks, bonds, or mutual funds through your bank and their value dropped, the FDIC will not reimburse you for the loss. The bank's failure does not change what you own; it only changes who holds it.

Safe deposit boxes are not covered. If you store jewelry, documents, or cash in a safe deposit box at your bank and the bank fails, the FDIC does not protect the contents. The box itself is the bank's property, and its contents are your responsibility.

Funds held in trust for someone else are not covered under your $250,000 limit. If you are holding money in a savings account that legally belongs to another person, that money is not protected by your account ownership. The person who owns the money would need to have their own account to receive FDIC coverage.

What happens when a bank fails

When the FDIC closes a bank, it typically arranges for another bank to take over the failed bank's deposits and accounts. You may wake up to find your account transferred to a new bank with no action required on your part. Your debit card, online login, and account number may change, but your money remains accessible.

If no bank takes over the deposits, the FDIC pays you directly. This process usually takes a few days to a few weeks. The FDIC will contact you with payment instructions. You do not need to file a claim; the FDIC has records of all deposits and pays automatically.

In the rare event that your covered balance is paid out by the FDIC rather than transferred to another bank, you will receive the full amount up to $250,000. Amounts over $250,000 are not recovered unless the bank's assets are later sold and generate enough money to pay uninsured depositors, which is uncommon.

Credit unions and NCUA insurance

If your account is at a credit union rather than a bank, it is insured by the National Credit Union Administration (NCUA), not the FDIC. The protection is identical: $250,000 per depositor per credit union per account category. The same rules about joint accounts, retirement accounts, and separate categories apply.

You can check whether a credit union is NCUA-insured by searching the NCUA's Credit Union Locator tool on their website. Most federally chartered credit unions are automatically insured. Some state-chartered credit unions may not be, so it is worth verifying if you use a smaller or local credit union.

Strategies for protecting money over $250,000

If you have more than $250,000 in savings, you can spread it across multiple FDIC-insured banks to keep all of it protected. Each bank provides a separate $250,000 limit. You can also use different account categories at the same bank: a savings account in your name, a joint savings account with your spouse, and a payable-on-death account each have their own $250,000 coverage.

Some people use a service called IntraFi (formerly Promontory Interbank Network) that automatically splits large deposits across multiple banks while keeping them in one account interface. You deposit money into one account, and IntraFi distributes it to multiple FDIC-insured banks behind the scenes. Each portion stays under $250,000 and is fully protected. Your bank may offer this service, or you can use it directly through some online platforms.

Retirement accounts like IRAs and 401(k)s held at banks are covered separately to $250,000 each. If you have a large retirement balance, ask your bank or plan administrator whether the funds are held at a single institution or spread across multiple banks for protection.

Frequently Asked Questions

What if I have more than $250,000 at one bank?

Only $250,000 is protected by the FDIC. The amount over $250,000 is not covered if the bank fails. You can move the excess to another FDIC-insured bank, use a different account category at the same bank, or use a service like IntraFi to split the deposit across multiple banks automatically.

Does FDIC insurance cover money I'm holding for someone else?

No. If the money legally belongs to another person, it is not protected under your account. The person who owns the money would need their own account at an FDIC-insured bank to receive coverage. Accounts held in trust for a minor or as a payable-on-death account are exceptions and are covered separately.

If my bank fails, how long does it take to get my money?

Usually a few days to a few weeks. If another bank takes over the failed bank's deposits, your account transfers automatically and you keep access. If the FDIC pays you directly, they contact you with instructions and send the funds. You do not need to file a claim.

Are online banks FDIC-insured?

Most are, but not all. Search the FDIC Bank Find tool with your bank's name to confirm. Many online banks are FDIC-insured and offer the same $250,000 protection as traditional banks. A few online lenders and fintech platforms are not FDIC-insured, so verify before opening an account.

Does FDIC insurance cover investment losses if I bought stocks through my bank?

No. FDIC insurance covers the balance in deposit accounts only. If you bought stocks, bonds, or mutual funds and their value dropped, the FDIC does not reimburse you. Those investments are your responsibility, and losses are not covered by deposit insurance.