FDIC insurance
Also called Federal deposit insurance
Federal protection that covers deposits at insured banks up to $250,000 per depositor, per insured bank, per ownership category if the bank fails.
What it means
The Federal Deposit Insurance Corporation is an independent U.S. government agency that insures deposits at member banks and savings associations. If an insured bank fails, the FDIC pays depositors their insured balances, usually within a few business days, often by moving accounts to another bank. No depositor has lost a penny of insured funds since federal deposit insurance began in 1934.
Coverage is $250,000 per depositor, per insured bank, for each ownership category, such as single accounts, joint accounts, certain retirement accounts and trust accounts. It covers deposit products like checking, savings, money market deposit accounts and CDs. It does not cover stocks, bonds, mutual funds, annuities, crypto or the contents of safe deposit boxes, even if bought through a bank.
Example
For example, a person with $200,000 in an individual savings account and a $100,000 joint account with a spouse at the same bank is fully covered. The individual account is under the $250,000 single-account limit, and each co-owner’s $50,000 share of the joint account falls in the separate joint ownership category.
How it’s used
- Checking whether savings above $250,000 are fully protected
- Comparing the safety of banks and finance apps
- Spreading large balances across banks or ownership categories
Good to know
- Balances above the limit can be protected by using more than one insured bank or different ownership categories.
Related terms
Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.