Key takeaways
- FDIC insurance protects deposits up to $250,000 per depositor, per insured bank, per ownership category, including principal and interest earned through the date a bank fails.
- By using different ownership categories, a married couple can insure $3 million or more at a single bank (see the worked example below).
- Trust accounts, including payable-on-death accounts, get $250,000 per beneficiary, up to $1.25 million per owner at each bank.
- FDIC insurance covers bank deposits only. It does not cover stocks, mutual funds, crypto, annuities, Treasuries or a fintech app’s own failure.
FDIC insurance is a federal guarantee that if your bank fails, you get your insured deposits back. The standard limit is $250,000 per depositor, per FDIC-insured bank, for each account ownership category. Since the FDIC began insuring deposits in 1934, no depositor has lost a penny of FDIC-insured funds.
So for most people, the honest answer to “is my money safe?” is yes. The details matter, though, once your balances climb, when you add joint owners or beneficiaries, or when your money sits in an app rather than directly at a bank. This guide explains how FDIC insurance works, how to calculate your coverage and how to protect balances above the limit.
What FDIC insurance is and who pays for it
The Federal Deposit Insurance Corporation is an independent U.S. government agency created by Congress in 1933, after thousands of banks failed in the early years of the Great Depression. Its job is to keep confidence in the banking system so a rumor about one bank doesn’t trigger a run on all of them.
Coverage is automatic. You don’t apply or pay for it. Whenever you open a deposit account at an FDIC-insured bank, you’re covered. The insurance fund is financed by premiums that banks pay, not by taxpayer appropriations, and it’s backed by the full faith and credit of the U.S. government.
Credit unions have an equivalent: the National Credit Union Share Insurance Fund, run by the National Credit Union Administration (NCUA), which also insures members’ accounts up to $250,000 under similar rules.
What FDIC insurance covers (and what it doesn’t)
| Covered | Not covered |
|---|---|
| Checking accounts | Stocks and bonds |
| Savings accounts | Mutual funds and money market funds |
| Money market deposit accounts | Crypto assets |
| Certificates of deposit (CDs) | Annuities and life insurance policies |
| Cashier’s checks, money orders and other official items issued by the bank | U.S. Treasury bills, notes and bonds (backed by the government, but not FDIC-insured) |
| Accrued interest through the failure date | Safe deposit boxes and their contents; losses from theft or fraud |
Here’s where people get tripped up: buying an investment at a bank doesn’t make it a deposit. If a bank’s investment arm sells you a mutual fund or annuity, it isn’t FDIC-insured, even if you bought it at a branch. Brokerage accounts may carry SIPC protection instead, which covers missing securities and cash (up to $500,000, including $250,000 for cash) if a brokerage fails, but never market losses.
How the $250,000 limit really works: ownership categories
The limit isn’t $250,000 per person, period. It’s $250,000 per depositor, per bank, per ownership category. Each category is insured separately, which is how you can legally have far more than $250,000 insured at one bank.
| Ownership category | Coverage at each bank |
|---|---|
| Single accounts (one owner, no beneficiaries) | $250,000 per owner, all single accounts combined |
| Joint accounts (two or more owners) | $250,000 per co-owner, all joint accounts combined |
| Certain retirement accounts (IRAs, self-directed 401(k)s and similar) | $250,000 per owner |
| Trust accounts (payable-on-death, living trusts, irrevocable trusts) | $250,000 per owner per beneficiary, up to $1,250,000 per owner |
| Business accounts (corporations, partnerships, LLCs, associations) | $250,000 per entity |
| Employee benefit plan accounts | $250,000 per participant’s share |
| Government accounts | $250,000 per official custodian (more in some cases) |
Two rules catch people. First, all of your accounts in the same category at the same bank are added together. A $150,000 savings account and a $150,000 CD, both in your name alone, total $300,000 in the single-account category, so $50,000 is uninsured. Second, different brands owned by the same bank share one limit. If a bank operates several online brands under one charter, your deposits across them are combined. Check the bank’s legal name on the FDIC’s BankFind tool.
The trust account rule (simplified in 2024)
Since April 1, 2024, the FDIC treats revocable trusts (including informal ones such as payable-on-death and “in trust for” accounts) and irrevocable trusts as one “trust accounts” category. Each owner is insured for $250,000 per eligible beneficiary, up to five beneficiaries, so the maximum is $1,250,000 per owner per bank. Naming a sixth beneficiary doesn’t add coverage.
Credit unions are moving to the same structure: the NCUA’s simplified trust rule takes effect on December 1, 2026, with the same $250,000-per-beneficiary formula and the $1,250,000-per-owner cap.
Worked example: how much is insured at one bank?
Consider a married couple, Owner A and Owner B, who keep everything at one FDIC-insured bank and have three children named as beneficiaries on a joint payable-on-death account.
| Accounts | Category | Maximum insured |
|---|---|---|
| Owner A savings + Owner B savings | Single (2 × $250,000) | $500,000 |
| Joint checking and joint CD | Joint (2 co-owners × $250,000) | $500,000 |
| Owner A IRA CD + Owner B IRA CD | Retirement (2 × $250,000) | $500,000 |
| Joint payable-on-death account, 3 children | Trust (2 owners × 3 beneficiaries × $250,000) | $1,500,000 |
| Total possible coverage | $3,000,000 |
Now a simpler case: a single person with $400,000 in one savings account in their own name. Only $250,000 is insured, so $150,000 is exposed. Two fixes: add two payable-on-death beneficiaries, which moves the account into the trust category with up to $500,000 of coverage, or move $150,000 to a different bank. Rather than doing the math by hand, plug your accounts into our FDIC insurance calculator.
From our banking team: In our experience with deposit accounts, coverage problems usually come from paperwork, not strategy. A payable-on-death designation that was never actually added, a beneficiary listed only by a nickname, or a “joint” account where the second person never signed can all change how the account is insured. After a big deposit, ask the bank to confirm how each account is titled and print the beneficiary page for your records.
What happens when a bank fails
Bank failures are uncommon, but they still happen. Six U.S. banks failed in 2026 through late September, all relatively small. When a bank is closed by its chartering regulator, the FDIC steps in as receiver and usually takes one of two routes:
- Another bank takes over the deposits. This is the most common outcome. Your accounts move to the acquiring bank, and your debit card, checks and direct deposits usually keep working. When Nano Banc of Irvine, California, failed on September 25, 2026, Sunwest Bank assumed substantially all of its deposits, and the FDIC said customers could keep using checks, ATMs and debit cards over that weekend.
- The FDIC pays you directly. If no buyer is found, the FDIC pays insured balances by check or by setting up an account for you at another insured bank. Federal law requires payment “as soon as possible,” and historically that has happened within a few business days.
Uninsured balances above the limit are a different story. You receive a receivership certificate and may recover some or all of that money over time as the FDIC sells the failed bank’s assets, but there’s no guarantee. In March 2023, regulators used a special systemic-risk exception to cover all deposits at Silicon Valley Bank and Signature Bank. That was an emergency decision, not a promise for the future, so don’t plan around it.
For a closer look at the failure process, see our complete guide to banking in America, which covers how deposit insurance fits into the wider system.
Fintech apps, brokered CDs and “pass-through” coverage
Many money apps and brokerage cash programs place your money at one or more partner banks. FDIC coverage can “pass through” to you, but only if the partner bank is insured, the account records show the funds belong to you, and the app keeps accurate records of each customer’s balance.
The key limit: FDIC insurance protects you if the bank fails. It does not protect you if the app or middleman fails. That gap became painfully clear in 2024, when the bankruptcy of fintech middleman Synapse left many app customers unable to access their money for months, even though the underlying banks hadn’t failed. The FDIC also bars companies from misrepresenting that uninsured products are FDIC-insured.
Before keeping a meaningful balance in an app, look up the partner bank’s name in the app’s terms, confirm it on BankFind and understand how deposits are recorded. Our guide to whether banking apps are safe walks through the checklist. Brokered CDs bought through a brokerage are generally FDIC-insured at the issuing bank, but count them toward your limit at that bank alongside any CDs you hold there directly.
How to protect balances over $250,000
- Spread money across banks. Each separately chartered bank gives you a fresh $250,000 per category.
- Use ownership categories. Joint accounts, IRAs and accounts with named beneficiaries each add coverage at the same bank.
- Add beneficiaries. A payable-on-death designation can raise coverage to as much as $1.25 million per owner per bank.
- Consider deposit-placement networks. Some banks offer services that spread large deposits across many insured banks while you deal with one.
- Use a credit union. NCUA coverage is separate from FDIC coverage, so a credit union account adds protection.
- Hold Treasury bills for large sums. They aren’t FDIC-insured, but they’re backed directly by the U.S. government.
- Watch mergers. If two of your banks merge, the FDIC insures deposits from the acquired bank separately for six months (CDs from the acquired bank generally until they mature), giving you time to rebalance.
Shopping for an insured place to earn more? Compare rates on our lists of the best high-yield savings accounts and best CD rates, and see how credit unions compare with banks.
How to check that your bank is insured
- Search the bank’s legal name on the FDIC’s BankFind Suite.
- Look for the official FDIC sign or digital FDIC signage on the bank’s website and app.
- For a credit union, use the NCUA’s Research a Credit Union tool.
- For an app, find the partner bank named in its terms and verify that bank.
- Use the FDIC’s Electronic Deposit Insurance Estimator (EDIE) or our FDIC insurance calculator to estimate coverage.
Frequently asked questions
Is FDIC insurance per account or per person?
Neither exactly. It’s per depositor, per bank, per ownership category. Several accounts in the same category at the same bank share one $250,000 limit, while accounts in different categories are insured separately.
How long does it take to get money back if a bank fails?
Usually very little time. In most failures another bank takes over the deposits and customers keep access right away. When the FDIC pays directly, it has historically done so within a few business days.
Are online banks FDIC-insured?
Many are. An online bank with its own charter is insured exactly like a branch bank. Some apps aren’t banks at all and rely on partner banks, so verify the bank name before depositing.
Does FDIC insurance cover fraud or stolen money?
No. FDIC insurance covers bank failure, not theft or scams. Unauthorized electronic transfers are handled under separate consumer protection rules, so report them to your bank right away.
Is my money safer in a credit union?
It’s equally protected. The NCUA insures credit union accounts up to $250,000 per member, per credit union, per category, and like the FDIC it’s backed by the full faith and credit of the U.S. government.
Sources: FDIC “Deposits at a Glance” and trust account rule (effective April 1, 2024), FDIC failed-bank announcement for Nano Banc (Sept. 25, 2026), NCUA trust rule fact sheet (effective Dec. 1, 2026), SIPC coverage limits, and public reporting on 2026 bank failures and the 2024 Synapse bankruptcy, all checked Nov. 6, 2026. Confirm your own coverage with your bank or the FDIC. This article is for educational purposes and isn’t financial advice.
Written by Chanchala
Founder & Lead Writer · B.Sc. Mathematics (Honors) · 9 years in banking & lending
Chanchala is the founder and lead writer of FinInfoBlog. She holds a B.Sc. in Mathematics (Honors) and has 9 years of experience in banking and lending. She writes plain-English guides on savings, CDs, loans, credit and personal finance for U.S. readers, and makes sure every example shows the math behind the money decision. How we research and fact-check.