Yes, online savings accounts are FDIC insured if the bank holds the insurance

Most online savings accounts held at banks with FDIC insurance are covered up to $250,000 per depositor, per bank, per account category. The FDIC does not care whether you opened the account in a branch, on a website, or through an app — the protection is the same. What matters is whether the institution holding your money is an FDIC-insured bank.

The catch is that not every online financial company is a bank. Some are credit unions (covered by NCUA instead), some are money market funds (not covered), and some are fintech apps that hold your money at a partner bank (covered only if that partner bank is FDIC-insured). You need to know which one you are dealing with before you assume your balance is protected.

The FDIC publishes a searchable list of insured institutions on its website. If your bank's name appears there, your online savings account is covered. If it does not, your money has no federal deposit insurance, no matter how safe the company claims to be.

Key Takeaways

  • Online savings accounts at FDIC-insured banks receive the same $250,000 per-account protection as brick-and-mortar accounts.
  • The FDIC does not insure money market funds, brokerage accounts, or accounts at fintech apps unless the app's partner bank is FDIC-insured.
  • You can verify whether your bank is FDIC-insured by searching the FDIC's Institution Directory on its website.
  • If you have multiple savings accounts at the same FDIC-insured bank, each account is covered separately up to $250,000.

How FDIC coverage works for online accounts

The FDIC insures deposits, not institutions. Your $250,000 limit applies per depositor, per bank, per account category. If you have a savings account and a checking account at the same FDIC-insured bank, each one is covered separately — so you could have $250,000 in savings and $250,000 in checking and both would be protected.

The account category matters. A regular savings account, a money market deposit account (MMDA), and a checking account are three separate categories. A certificate of deposit (CD) is its own category. If you have $200,000 in a savings account and $200,000 in a CD at the same bank, both are fully covered because they are different categories.

Joint accounts are treated differently. If you and another person own a joint savings account at an FDIC-insured bank, the account is covered up to $250,000 per owner — so a joint account could theoretically hold $500,000 and both owners would be fully protected. The FDIC counts each owner's share separately.

Which online banks are FDIC-insured and which are not

Most major online banks are FDIC-insured. Marcus by Goldman Sachs, Ally Bank, American Express Bank, Discover Bank, and Charles Schwab Bank all hold FDIC insurance. These are actual banks with FDIC membership, even though they operate primarily online and have no physical branches.

Some fintech apps and online platforms are not banks themselves. Wealthfront, Betterment, and Robinhood are investment platforms that may hold your cash at a partner bank. Your money is only FDIC-insured if the partner bank is FDIC-insured — and the coverage may be lower if the platform pools customer deposits. Always check the fine print to see which bank holds your cash and whether that bank appears on the FDIC's list.

Credit unions use a different insurance system. If your online account is at a credit union, it is covered by the National Credit Union Administration (NCUA), not the FDIC. NCUA coverage works similarly — $250,000 per member, per credit union, per account category — but it is a separate system. Check whether your institution is a bank or a credit union before assuming which agency covers your money.

What happens if your bank fails

If an FDIC-insured bank fails, the FDIC steps in and pays depositors up to the coverage limit. You do not have to do anything — the FDIC handles the payout automatically. In most cases, you will have access to your insured funds within one to two business days, either through a transfer to another bank or through a check.

The FDIC has never failed to pay an insured depositor in full since the agency was created in 1933. The insurance fund is backed by premiums that banks pay to the FDIC, not by taxpayer money. When a bank fails, the FDIC either arranges for another bank to take over the failed bank's deposits or pays depositors directly.

If your balance exceeds the $250,000 limit at a failed bank, the amount over the limit is not covered. You become an unsecured creditor and may recover some or all of the uninsured portion, but there is no may provide. This is why people with large balances often split their money across multiple FDIC-insured banks.

Accounts and categories that are not FDIC-insured

Money market mutual funds are not FDIC-insured, even if you buy them through an online bank. These are investment products, not deposits. If you see a high-yield savings account offering 5% or more, check whether it is a money market fund or a true savings account — the label matters for insurance purposes.

Brokerage accounts and stock holdings are not FDIC-insured. If you hold stocks, bonds, or ETFs through an online brokerage, the FDIC does not cover those investments. Some brokerages carry SIPC insurance instead, which protects against brokerage failure but not against investment losses.

Cryptocurrency held on any platform — online or otherwise — is not FDIC-insured. Stablecoins, Bitcoin, and other digital assets are not bank deposits and receive no federal deposit insurance. Some crypto platforms claim to hold reserves or carry insurance, but that is different from FDIC coverage.

How to verify your bank is FDIC-insured

Go to the FDIC's Institution Directory at banks.data.fdic.gov. Search by bank name or by the city and state where you opened your account. The directory shows whether the bank is FDIC-insured, which FDIC region it belongs to, and when it was last examined.

If your bank does not appear in the directory, it is not FDIC-insured. Some online banks operate under a parent company name that differs from the brand you see as a customer — for example, Marcus by Goldman Sachs operates under the legal name Goldman Sachs Bank USA. Search for the legal entity name, not the brand name, if the first search does not return results.

You can also call the FDIC's Customer Service line at 1-877-ASK-FDIC (1-877-275-3342) and ask whether a specific bank is insured. The FDIC will tell you the coverage limits for your account type and answer questions about what is and is not covered.

Splitting deposits across banks to protect larger balances

If you have more than $250,000 to save, you can open accounts at multiple FDIC-insured banks and keep each balance at or below $250,000. Each bank is a separate FDIC entity, so your money is fully covered at each one. This strategy is common for people with substantial savings who want full insurance protection.

You do not need to use different account types to spread coverage — simply opening a savings account at Bank A and another savings account at Bank B gives you $250,000 coverage at each bank. The FDIC counts each bank separately, regardless of whether the accounts are the same type.

Some people use a service called IntraFi (formerly Promontory) to manage deposits across multiple banks automatically. You deposit money into one account, and IntraFi splits it across partner banks to keep each balance under the $250,000 limit. This is useful if you want to avoid managing multiple logins, but it costs a small fee and is mainly used by people with very large balances.

Frequently Asked Questions

Is my money safer in an online bank than a regular bank?

Safety from loss is the same — both are FDIC-insured up to $250,000 if they are FDIC-insured banks. Online banks may have different cybersecurity practices, but the FDIC insurance protection is identical. What differs is convenience and interest rates, not deposit insurance.

What if I have $300,000 in one online savings account?

Only $250,000 is covered by FDIC insurance. The remaining $100,000 is uninsured. If the bank fails, you would lose that $100,000 unless you recover it as an unsecured creditor in the bank's liquidation. Move the extra $100,000 to another FDIC-insured bank to protect it.

Does FDIC insurance cover me if I lose my password or get hacked?

No. FDIC insurance covers bank failure, not theft or fraud. If someone hacks your account and transfers your money, that is a separate issue handled by the bank's fraud department and your own liability protections. Report unauthorized transactions to your bank immediately.

Are high-yield savings accounts at online banks FDIC-insured?

Yes, if they are offered by an FDIC-insured bank. High-yield savings accounts at banks like Marcus, Ally, and American Express are FDIC-insured deposits, not investments. Verify the bank name in the FDIC directory to be certain.

What if my online bank is acquired by another bank?

Your FDIC coverage transfers to the acquiring bank. If Bank A (FDIC-insured) is bought by Bank B (also FDIC-insured), your deposits remain covered under the same $250,000 limit. The FDIC tracks the change and your protection continues without interruption.