Yes, bank CDs are FDIC insured, with limits

Certificates of Deposit (CDs) held at banks are covered by FDIC insurance up to $250,000 per depositor, per bank, per ownership category. This means if your bank fails, the FDIC will return your money and any accrued interest up to that limit. The coverage applies whether you have a CD with a three-month term or a five-year term — the length of the CD does not change your protection.

The key word is "bank." CDs sold through brokerage firms, credit unions, or non-bank financial companies may not carry the same protection. A brokerage CD might be FDIC insured if the brokerage firm has placed it at an FDIC-insured bank, but you need to confirm this with your provider. Credit union CDs are insured by the National Credit Union Administration (NCUA), not the FDIC, though the coverage limit is the same: $250,000.

If you have multiple CDs at the same bank, the FDIC adds them together when calculating your coverage. If you have $150,000 in one CD and $120,000 in another CD at the same bank, only $250,000 total is insured — you would lose $20,000 if the bank failed. To protect more than $250,000 in CDs, you need to spread them across different banks or use different ownership categories (such as a CD in your name alone and a separate CD in joint ownership with a spouse).

Key Takeaways

  • Bank CDs are FDIC insured up to $250,000 per depositor at each bank, regardless of the CD term length.
  • Multiple CDs at the same bank count toward the same $250,000 limit, so spreading money across different banks protects more than $250,000.
  • Brokerage CDs and credit union CDs have different insurance providers and may have different coverage rules, so check with your provider.
  • The FDIC covers both the principal and any interest that has accrued on the CD at the time of bank failure.

How the $250,000 limit works across multiple CDs

The FDIC does not count each CD separately. Instead, it adds all deposits you own at the same bank in the same category and insures the total up to $250,000. If you have a $100,000 CD maturing in six months and a $180,000 CD maturing in two years, both at the same bank, the FDIC treats them as a combined $280,000 deposit — and only $250,000 is covered.

This is why people who want to protect large sums in CDs often use multiple banks. If you have $500,000 to invest in CDs, you could put $250,000 at Bank A and $250,000 at Bank B, and both amounts would be fully insured. The FDIC coverage is per bank, not per CD or per account number.

Ownership category also matters. A CD in your name alone is insured separately from a CD you hold jointly with a spouse. A CD in a revocable trust is insured separately from a CD in your individual name. Each category gets its own $250,000 limit at each bank. This structure allows married couples or families to protect more money by using different ownership categories, though most people with smaller CD balances never need to worry about this.

What happens if your bank fails

If an FDIC-insured bank fails, the FDIC steps in as the insurer of last resort. You do not have to do anything to file a claim — the FDIC automatically protects your covered deposits. The agency will either transfer your CD to another bank or pay you directly, usually within a few business days.

In most cases, the FDIC arranges for another bank to take over the failed bank's deposits, and your CD simply moves to the new bank. You keep your CD, your interest rate, and your maturity date. You may receive a new account number and new statements, but your money remains protected and earning interest as before.

If no bank takes over your deposits, the FDIC sends you a check for the insured amount. This is rare in modern banking — most bank failures result in a transfer to another institution. The FDIC has a track record of paying insured depositors within days, not months.

CDs at brokerage firms and online banks

A CD purchased through a brokerage firm (such as Fidelity, Charles Schwab, or Vanguard) may still be FDIC insured, but the coverage works differently. Many brokerages place customer CDs at multiple FDIC-insured banks behind the scenes. If the brokerage has done this, your CD is insured up to $250,000 at each bank where it is held, not $250,000 total across all your brokerage CDs.

This arrangement is called "deposit sweep" or "CD laddering through multiple banks," and it allows brokerage customers to protect more than $250,000 in CDs. However, you must confirm with your brokerage that they are using this method. Some brokerages do not offer this protection, and some charge a fee for it. Ask your brokerage directly: "Are my CDs FDIC insured, and if so, at how many different banks are they held?"

Online banks are still banks, and their CDs are FDIC insured the same way as CDs at brick-and-mortar banks. An online bank's FDIC insurance limit is $250,000 per depositor, just like any other bank. The fact that you cannot walk into a physical branch does not change your coverage.

Credit union CDs and NCUA insurance

If you hold a CD at a credit union, it is not covered by the FDIC. Instead, it is insured by the National Credit Union Administration (NCUA), a separate federal agency. The coverage limit is the same — $250,000 per member at each credit union — but the insurer is different.

Credit union CDs follow the same rules as bank CDs: multiple CDs at the same credit union count toward the same $250,000 limit, and different ownership categories (individual, joint, trust) each get their own $250,000 limit. If you want to confirm that your credit union is NCUA insured, you can search the NCUA's database on their website.

How to check if your bank is FDIC insured

You can verify that your bank is FDIC insured by searching the FDIC's Bank Find tool on their website. Enter your bank's name and state, and the tool will show you whether it is insured and provide details about its coverage. This takes less than a minute and gives you certainty.

If your bank is not in the FDIC database, it is not FDIC insured, and your CD is not protected by federal insurance. This is rare for large, well-known banks, but it can happen with smaller institutions or non-bank financial companies that offer CDs. Before opening a CD anywhere, confirm the institution's insurance status.

Your bank statements and CD confirmations should also state that deposits are FDIC insured. If this language is missing, ask your bank or brokerage directly. Do not assume — verify.

Frequently Asked Questions

If I have $300,000 in a CD at one bank, how much is insured?

Only $250,000 is insured by the FDIC. The remaining $50,000 is not covered. To protect the full $300,000, you would need to split it between two banks — $250,000 at Bank A and $50,000 at Bank B — so both amounts are fully insured.

Does the interest I earn on my CD count toward the $250,000 limit?

Yes. The FDIC insures both your principal and any accrued interest up to $250,000 total. If you have a $245,000 CD that earns $8,000 in interest before the bank fails, only $250,000 of that $253,000 is covered. The extra $3,000 in interest is not insured.

Are CDs in a revocable trust insured separately from CDs in my individual name?

Yes. A CD held in a revocable trust is a different ownership category and gets its own $250,000 limit at each bank. This means you could have $250,000 in an individual CD and $250,000 in a trust CD at the same bank, and both would be fully insured.

What if my brokerage goes out of business but the bank holding my CD is fine?

Your CD is still insured by the FDIC because it is held at an FDIC-insured bank, not at the brokerage. The brokerage is just the intermediary. Even if the brokerage fails, your CD and its FDIC insurance remain intact at the underlying bank.

Can I lose money on a CD if the bank fails?

No, not up to the $250,000 limit. CDs are not investments in the bank's stock or performance — they are deposits. The FDIC insures deposits, so your principal and accrued interest are protected up to $250,000 per bank, regardless of the bank's financial condition.