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

An online savings account at an FDIC-insured bank carries the same deposit insurance as a brick-and-branch account at the same bank. The FDIC does not distinguish between online and in-person banking—what matters is whether the bank itself holds FDIC insurance, not how you access it. Most large online banks (Ally, Marcus, Discover, American Express Personal Savings) are FDIC-insured. Some online-only banks are not, so you have to check each one.

The standard FDIC coverage limit is $250,000 per depositor, per bank, per account category. That means if you have $250,000 in a savings account at one FDIC-insured bank, all of it is covered. If you have $300,000, only $250,000 is protected—the extra $50,000 is not. The coverage applies to the balance on the day the bank fails, not to interest earned after that point.

Online banks fail rarely. The last major online bank failure was NetBank in 2007. What matters more is whether you keep money above the $250,000 limit at a single bank. If you do, the excess sits uninsured.

Key Takeaways

  • FDIC insurance covers online savings accounts at FDIC-insured banks up to $250,000 per depositor per bank, regardless of whether you bank online or in person.
  • You must verify that the specific online bank holds FDIC insurance—not all do—by checking the FDIC's Bank Find tool or the bank's own disclosures.
  • Money above $250,000 at one bank is not covered, so splitting deposits across multiple FDIC-insured banks protects larger balances.
  • FDIC coverage protects against bank failure only, not against fraud, hacking, or your own withdrawal mistakes.

How to confirm an online bank is FDIC insured

The FDIC maintains a searchable database called Bank Find at banks.data.fdic.gov. Type in the bank's name and it will show you the FDIC certificate number, the date it joined the FDIC, and which branches or online operations are covered. If the bank does not appear in Bank Find, it is not FDIC-insured.

You can also look at the bank's website. FDIC-insured banks are required to display FDIC insurance information somewhere on their site, usually in the footer or in a "Security" or "About Us" section. They will state the coverage limit and often link to Bank Find. If you see no mention of FDIC insurance and Bank Find does not list the bank, assume it is not covered.

A few online banks operate under different insurance schemes. For example, some credit unions use NCUA (National Credit Union Administration) insurance instead of FDIC, which works the same way but is a separate program. Others may be backed by private insurance or no insurance at all. Read the bank's deposit insurance disclosure carefully—it will say which program covers your money.

What FDIC coverage does and does not protect

FDIC insurance covers the balance in your account if the bank fails and cannot return your money. It does not cover losses from fraud, hacking, or your own mistakes. If someone steals your login credentials and empties your account, the FDIC will not reimburse you—that is a matter between you and the bank, and possibly law enforcement. If you accidentally transfer money to the wrong account, the FDIC does not cover that either.

FDIC coverage also does not apply to investments held at the bank, such as stocks, bonds, or mutual funds. If you buy a stock through an online brokerage that is part of a bank, the stock is not FDIC-insured. Cash held in a brokerage account may be insured under a separate SIPC (Securities Investor Protection Corporation) program, which has different limits and rules.

The coverage is per bank, not per account type. If you have a savings account and a checking account at the same FDIC-insured bank, the $250,000 limit applies to your combined balance across both accounts, not $250,000 in each. However, certain account categories—such as retirement accounts (IRAs) and trust accounts—have separate $250,000 limits, so money in an IRA at one bank does not count toward the limit on your regular savings account at that same bank.

Splitting money across banks to stay fully covered

If you have more than $250,000 to keep in savings, you can open accounts at multiple FDIC-insured banks and keep up to $250,000 at each one. Each bank's FDIC coverage is independent. For example, $250,000 at Ally Bank and $250,000 at Marcus by Goldman Sachs are both fully covered because they are separate institutions.

Some people use a service called IntraFi (formerly Promontory Interbank Network) to manage this automatically. You deposit money into one account, and IntraFi splits it across multiple FDIC-insured banks behind the scenes, keeping each deposit under the $250,000 limit. You see one balance and one login, but your money is spread across several banks. The tradeoff is that you may earn a lower interest rate than you would at a single high-yield savings account, because IntraFi takes a cut.

For most people, splitting across two or three banks is simpler than using IntraFi. Open a savings account at one online bank, then a second account at another if you have more than $250,000. You will have two logins and two statements, but you keep full control and usually earn the highest available rate at each bank.

What happens if an online bank fails

If an FDIC-insured online bank fails, the FDIC steps in as receiver. The agency will attempt to transfer your account to another FDIC-insured bank so you can access your money without interruption. If no bank takes over the account, the FDIC will pay you directly up to the $250,000 limit, usually within a few business days. You do not have to file a claim or do anything—the FDIC handles it automatically.

During a bank failure, you may lose access to your account for a short time while the FDIC arranges the transfer or processes payments. You will not lose money within the $250,000 limit, but you may not be able to withdraw or transfer funds for a day or two. Any balance above $250,000 at that bank is at risk and may not be recovered in full.

Bank failures are rare in the United States. The FDIC has been in operation since 1933, and most online banks are well-capitalized and regularly examined. The last bank failure in the U.S. was in 2023, and the FDIC resolved it without losses to depositors with balances under $250,000.

FDIC coverage for joint accounts and special account types

If you hold a joint savings account with another person at an FDIC-insured bank, each person's share is covered up to $250,000. So a joint account with $500,000 is fully covered—$250,000 for you and $250,000 for the other person. The coverage applies to each owner's interest in the account, not to the account as a whole.

Retirement accounts (IRAs, SEP-IRAs, and similar plans) have their own $250,000 FDIC limit separate from your regular savings account. If you have a traditional IRA with $250,000 and a savings account with $250,000 at the same FDIC-insured bank, both are fully covered because they are different account categories.

Trust accounts (accounts held in trust for a beneficiary) also have separate coverage. The rules are more complex for trusts, and coverage depends on how the trust is structured and how many beneficiaries it names. If you hold money in trust, contact the bank or the FDIC directly to confirm your coverage.

Frequently Asked Questions

Does FDIC insurance cover money I lose to fraud or hacking?

No. FDIC insurance covers bank failure only. If your account is hacked or you are defrauded, that is a separate issue between you and the bank. Report it to the bank and law enforcement immediately. Many banks offer fraud protection or reimbursement as a customer service, but FDIC insurance does not require them to do so.

If I have $300,000 at one online bank, how much is covered?

$250,000 is covered by FDIC insurance. The remaining $50,000 is uninsured. To protect the full $300,000, move $50,000 to a savings account at a different FDIC-insured bank.

Are online banks safer than traditional banks?

Safety depends on FDIC insurance and the bank's security practices, not on whether it is online or in-person. An online bank with FDIC insurance is as safe as a traditional bank with FDIC insurance, as far as deposit protection goes. Both are covered up to $250,000 per account category.

What if an online bank is not FDIC insured?

Your money is not protected if the bank fails. Check Bank Find before opening an account. If you already have money at a non-FDIC-insured bank, consider moving it to an FDIC-insured bank or credit union with NCUA insurance.

Do I need to do anything to activate FDIC coverage?

No. FDIC coverage is automatic at any FDIC-insured bank. You do not need to sign up, pay a fee, or take any action. As long as your balance is at or below $250,000 per account category, you are covered.