How Much Money Can You Put in a Savings Account?

Savings accounts offer a secure location for individuals to keep their money, providing a reliable way to save for future goals or unexpected expenses. While there are generally no strict upper limits on the total amount of money one can deposit, it is important to understand how much is protected in a bank failure. This protection comes from a federal agency that provides insurance coverage.

Understanding FDIC Insurance Coverage

The Federal Deposit Insurance Corporation (FDIC) insures deposits in banks and savings associations. An “insured bank” is a financial institution that is a member of the FDIC, meaning your deposits at that bank are protected by the agency.

The standard insurance amount is $250,000 per depositor, per insured bank, for each ownership category. If you have multiple accounts at the same insured bank, the total of all your deposits within a specific ownership category is aggregated. For example, a single individual with a checking account, a savings account, and a certificate of deposit (CD) all in their name at one bank would have the sum of those accounts insured up to $250,000.

For joint accounts, where two or more people share ownership, each co-owner’s share is separately insured up to $250,000. A jointly held account with two owners can be insured for up to $500,000. FDIC insurance covers both the principal amount of your deposits and any accrued interest.

FDIC insurance specifically covers deposit products like checking accounts, savings accounts, money market deposit accounts, and certificates of deposit. However, it does not extend to investment products such as stocks, bonds, mutual funds, annuities, and cryptocurrencies.

Maximizing FDIC Protection for Larger Deposits

For individuals with deposits exceeding the standard $250,000 limit, it is possible to increase FDIC coverage within a single institution by utilizing different ownership categories. The FDIC insures deposits separately for each distinct ownership category. Common ownership categories include single accounts, joint accounts, certain retirement accounts, and revocable and irrevocable trust accounts.

For instance, an individual could have a single account insured for up to $250,000, a joint account with another person also insured up to $250,000 per owner, and a self-directed retirement account, such as an Individual Retirement Account (IRA), separately insured for up to $250,000. By diversifying account types across these categories at the same bank, a person can significantly increase their total insured amount. For example, one person could have $250,000 in a single account, $250,000 in their share of a joint account, and $250,000 in an IRA at the same bank, totaling $750,000 in insured funds.

Another strategy for protecting larger sums is to spread deposits across multiple FDIC-insured banks. Since the $250,000 limit applies per depositor, per insured bank, placing funds in separate institutions allows each bank to provide its own distinct coverage. For example, $250,000 at Bank A and another $250,000 at Bank B would both be fully insured.

When considering spreading funds across multiple banks, it is important to ensure that each institution is indeed a distinct FDIC-insured entity. Some banks operate under the same holding company or share the same FDIC certificate, which means they are considered the same bank for insurance purposes. Verifying a bank’s FDIC insurance status and distinctness can typically be done through the FDIC’s BankFind tool or by inquiring directly with the institution. By understanding and applying these strategies, individuals can effectively protect substantial amounts of savings beyond the basic per-account limit.