How Much Is FDIC Insured in a Bank?

The Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency established to protect depositors. Its primary mission involves maintaining stability and public confidence within the nation’s financial system by insuring deposits. This safeguards individuals’ money in the unlikely event of a bank failure. This protection is automatic for any deposit account opened at an FDIC-insured bank.

Standard Coverage Amount

The standard FDIC insurance coverage amount is $250,000 per depositor, per insured bank, for each account ownership category. This limit applies to the total of a depositor’s funds held in various types of accounts at a single institution. Covered financial products include checking accounts, savings accounts, money market deposit accounts (MMDAs), and certificates of deposit (CDs). Both the principal amount deposited and any accrued interest are included in this $250,000 limit. Certain financial products are not covered by FDIC insurance, even if offered by an FDIC-insured bank. These include investment products such as stocks, bonds, and mutual funds, which are subject to market fluctuations. Annuities, cryptocurrencies, and the contents of safe deposit boxes are also not protected by FDIC deposit insurance.

Coverage for Different Account Ownerships

The $250,000 insurance limit applies differently based on how accounts are owned, which can allow for greater total coverage at a single bank.

Single Accounts

For single accounts, owned by one person, all deposits held under that individual’s name at the same bank are added together and insured up to $250,000. Sole proprietorship accounts are also insured under this single ownership category.

Joint Accounts

For joint accounts, each co-owner is insured up to $250,000 for their share of all joint accounts at the same bank. For example, a joint account with two co-owners can be insured for up to $500,000, assuming both individuals have equal withdrawal rights. To qualify, all co-owners must be living individuals.

Retirement Accounts

Certain retirement accounts, such as IRAs, SEP IRAs, SIMPLE IRAs, and self-directed 401(k)s, are insured separately from other account types. The total of all such retirement accounts owned by the same person at a single bank is aggregated and insured up to $250,000. Naming beneficiaries on these specific retirement accounts does not increase their deposit insurance coverage.

Revocable Trust Accounts

For revocable trust accounts, including informal payable-on-death (POD) accounts and formal living trusts, deposits are insured up to $250,000 per unique beneficiary. These rules apply to both revocable and irrevocable trusts. An owner can receive up to $1,250,000 in coverage for trust deposits if five or more unique beneficiaries are named. Other ownership categories, such as corporate accounts and government accounts, also have their own separate insurance limits.

Maximizing Your Coverage

Depositors can strategically structure their funds to secure coverage for amounts exceeding the standard $250,000 limit.
One straightforward method involves distributing funds across multiple FDIC-insured banks. Since the $250,000 limit applies per depositor, per insured bank, funds deposited at different institutions are separately insured. For instance, holding $250,000 at one bank and an additional $250,000 at a different FDIC-insured bank would result in both amounts being fully protected.
Another strategy is to utilize different ownership categories within the same bank. Each distinct ownership category receives its own $250,000 insurance limit. This means an individual could have a single ownership account, a joint account, and a retirement account at the same institution, with each category separately insured up to $250,000. Simply opening multiple checking accounts under the same individual ownership at the same bank will not increase coverage beyond the initial $250,000 limit. By utilizing different ownership categories, a family might have over $1 million insured at a single bank by holding individual accounts, joint accounts, and various retirement accounts.

Confirming Your Bank’s Coverage

Confirm that your bank is FDIC insured to ensure your deposits are protected. Most FDIC-insured institutions display the official FDIC sign prominently at their branch locations and on their websites, often stating “Member FDIC.” This visual indicator signifies their participation in the deposit insurance program. For definitive verification, individuals can use the FDIC’s “BankFind” tool, available on their official website at fdic.gov. This online resource allows users to search for specific bank names and confirm their insurance status.