Is the Money in My Account Safe?

Summary

• Deposits at an FDIC-insured bank are automatically insured up to applicable limits.
• The standard FDIC insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
• Checking accounts, savings accounts, money market deposit accounts and certificates of deposit are among the deposit products FDIC insurance covers.
• Coverage can exceed $250,000 when deposits qualify under different ownership categories.
• Understanding how your accounts are titled can help you determine how much of your money is insured.

Keeping money in an insured financial institution gives your deposits an important layer of protection. At banks, that protection comes from the Federal Deposit Insurance Corporation (FDIC). Credit unions generally receive similar deposit insurance through the National Credit Union Administration (NCUA).

For customers of an FDIC-insured bank, coverage is automatic for eligible deposit accounts. You do not need to apply for FDIC insurance separately.

How FDIC Insurance Protects Your Money

The FDIC protects eligible deposits if an insured bank fails. The standard insurance amount is $250,000 per depositor, per FDIC-insured bank, for each account ownership category.

Eligible deposit products include checking and savings accounts, money market deposit accounts and certificates of deposit (CDs). Certain retirement deposit accounts, including IRAs held as deposits at an insured bank, may also qualify for FDIC coverage under a separate ownership category.

Not every financial product offered through a bank is a deposit. Stocks, bonds, mutual funds, annuities and life insurance policies are not covered by FDIC deposit insurance.

How Much of Your Money Is Insured?

Your coverage depends on both the amount you have on deposit and the ownership category of your accounts.

For example, if you own a checking account and a savings account by yourself at the same insured bank, both generally fall within the single account ownership category. The balances are added together and insured up to $250,000.

Deposits held in different ownership categories may receive separate coverage. That means a person may qualify for more than $250,000 of total FDIC insurance at one bank when the accounts meet the requirements for separate ownership categories.

How Are Joint Accounts Insured?

Joint accounts have their own ownership category. In general, each co-owner's combined ownership share in all qualifying joint accounts at the same insured bank is covered up to $250,000.

For example, two people who jointly own a qualifying account may have up to $500,000 of total coverage for that account when each person's ownership share is $250,000 or less and FDIC requirements are met.

How Are Trust Accounts Insured?

Trust accounts follow different rules. In general, FDIC coverage is calculated based on the number of account owners and eligible beneficiaries, subject to FDIC requirements and coverage limits.

Because trust arrangements can vary, it is important to review the current FDIC rules rather than assume that every trust receives the same amount of coverage.

How Can You Check Your Coverage?

Start by confirming that your bank is FDIC insured and identifying how each of your deposit accounts is owned. Then consider whether you have multiple accounts within the same ownership category or accounts that qualify under different categories.

The FDIC provides resources for reviewing deposit insurance coverage, including its Electronic Deposit Insurance Estimator (EDIE). If your deposits are approaching or exceeding standard insurance limits, you can also speak with your bank about how your accounts are titled and how FDIC rules may apply.

The Bottom Line

Keeping eligible deposits at an FDIC-insured bank provides automatic protection up to applicable insurance limits. Knowing your account ownership categories can help you understand how much coverage you have and whether you should take a closer look at how your deposits are structured.