FDIC Insurance Limits: How the $250,000 Coverage Really Works

Short answer: The standard FDIC insurance limit is $250,000 per depositor, per insured bank, for each account ownership category. It isn't per account: accounts in the same category at the same bank are added together. But single, joint, retirement and trust accounts are each separate categories, so one person or family can have well over $250,000 insured at one bank.

The $250,000 figure is easy to remember. How it applies is where people get tripped up. This guide explains the ownership categories, what's covered and what isn't, and how to check your own coverage.

What Is the FDIC Insurance Limit?

The FDIC states that "the standard maximum deposit insurance amount is $250,000 per depositor, per insured bank." Each account ownership category is insured separately up to that amount.

Three parts of that rule matter:

• Per depositor. The limit applies to each person (or business) whose money is in the account.
• Per insured bank. Coverage at one FDIC-insured bank is separate from coverage at another.
• Per ownership category. The FDIC groups accounts by how they're owned. Each category gets its own limit.

Coverage is automatic. The FDIC says it applies "whenever a deposit account is opened at an FDIC-insured bank." You don't have to apply or pay for it.

Is FDIC Insurance Per Account?

No. This is the most common mix-up. If you have a checking account, a savings account and a CD at the same bank, all in your name alone with no beneficiaries, they're all single accounts. The FDIC adds them together and insures the total up to $250,000.

Opening more accounts of the same type at the same bank doesn't raise your coverage. Using a different ownership category, or a different insured bank, can.

What Are the FDIC Ownership Categories?

The FDIC lists these ownership categories in its guide to insured deposits:

Ownership category	How it's insured
Single accounts	One owner, no beneficiaries. All of an owner's single accounts at the bank are added together and insured up to $250,000. Sole proprietorship accounts count here.
Joint accounts	Each co-owner's shares of all joint accounts at the bank are added together and insured up to $250,000 per co-owner.
Certain retirement accounts	Traditional, Roth, SEP and SIMPLE IRAs and some self-directed plans. Combined and insured up to $250,000 per owner.
Trust accounts	Up to $250,000 per unique eligible beneficiary, with a maximum of $1,250,000 per owner for five or more beneficiaries.
Employee benefit plan accounts	For plans that qualify for pass-through coverage, each participant's interest is insured up to $250,000.
Corporation, partnership and unincorporated association accounts	Insured separately from the owners' personal accounts, up to $250,000 combined, no matter how many owners or signers.
Government accounts	Insured to the official custodian of the funds rather than the government unit.

The categories below are the ones most households use.

How Much Is a Joint Account Insured For?

The FDIC adds up each co-owner's share of every joint account at the bank. Each co-owner is insured up to $250,000 for that total. A joint account held by two people can therefore be insured up to $500,000 at one bank.

Joint-account coverage is separate from each person's single-account coverage. The FDIC also requires co-owners to be living people, not businesses or trusts.

Are IRAs and Retirement Accounts FDIC Insured?

Deposits held in certain retirement accounts at an insured bank have their own category. The FDIC lists these, among others:

• Traditional IRAs
• Roth IRAs
• SEP IRAs
• SIMPLE IRAs
• Self-directed 401(k), profit-sharing and Keogh plans, and self-directed SIMPLE IRAs held as a 401(k) plan
• Certain Section 457 plans

An owner's deposits in these accounts at the same bank are added together and insured up to $250,000. The FDIC says naming beneficiaries doesn't increase retirement account coverage.

Only the deposits in a retirement account are covered. If your IRA holds mutual funds or stocks, those investments aren't protected by FDIC insurance. Our guide to mutual funds vs. index funds explains how those investments work.

How Are Trust Accounts Insured?

Trust accounts follow rules that took effect April 1, 2024. A trust account is insured up to $250,000 per unique eligible beneficiary. Coverage tops out at $1,250,000 per owner, per bank, which is reached with five or more beneficiaries.

Eligible beneficiaries are living people, charities and nonprofit organizations that meet IRS rules. If you're relying on trust coverage for a large balance, run your accounts through the FDIC's estimator before assuming they're fully insured.

How Can You Insure More Than $250,000?

You have two main options, and you can combine them:

1. Spread money across ownership categories at one bank. Each category has its own limit.
2. Spread money across different FDIC-insured banks. Each bank's coverage is separate.

Here's how ownership categories could add up for a married couple at one bank. This is an illustration of the FDIC's rules, not advice about how to set up your accounts:

Account	Owner	Insured up to
Single account	Spouse A	$250,000
Single account	Spouse B	$250,000
Joint account	Spouses A and B	$500,000 ($250,000 each)
IRA deposits	Spouse A	$250,000
IRA deposits	Spouse B	$250,000
Total		$1,500,000

Each account has to meet the FDIC's requirements for its category. Adding trust accounts with eligible beneficiaries could raise the total further.

To check your own setup, use the FDIC's Electronic Deposit Insurance Estimator (EDIE) at edie.fdic.gov, or call the FDIC at 1-877-ASK-FDIC (1-877-275-3342).

What Does FDIC Insurance Cover?

The FDIC lists these deposit products as covered at insured banks:

• Checking accounts
• Savings accounts
• Money market deposit accounts
• Certificates of deposit (CDs)
• Prepaid cards, if certain FDIC requirements are met

Our guides to checking vs. savings accounts and money market accounts vs. savings accounts explain how these accounts differ.

What Isn't Covered by FDIC Insurance?

The FDIC says not all products offered by banks are covered. It doesn't insure these, "even if they were purchased at an insured bank":

• Stocks and bonds
• Mutual funds
• Crypto assets
• Life insurance policies and annuities
• Municipal securities
• U.S. Treasury bills, notes and bonds
• Safe deposit boxes and their contents

A money market deposit account at a bank is insured. A money market mutual fund is an investment and isn't.

What Happens If Your Bank Fails?

When an insured bank fails and no other bank takes over its deposits, the FDIC pays depositors directly. The FDIC says "such payments usually begin within a few days after the bank's closing."

Insured coverage includes your principal plus any interest accrued through the date the bank closed. Money above the insured limit isn't covered by deposit insurance.

Are Credit Unions Covered Too?

Federally insured credit unions have their own insurance: the National Credit Union Administration's Share Insurance Fund. The NCUA says the fund insures individual accounts at federally insured credit unions up to $250,000, and that it's "backed by the full faith and credit of the United States."

The NCUA covers share draft, share savings and share certificate accounts. Like the FDIC, it uses ownership categories, including single, joint, IRA and trust accounts. It doesn't cover stocks, bonds, mutual funds, annuities, life insurance, crypto or safe deposit boxes.

How Do You Check Whether Your Bank Is Insured?

• Banks: Look up the bank with the FDIC's BankFind tool at banks.data.fdic.gov/bankfind-suite/bankfind.
• Credit unions: Use the NCUA's Credit Union Locator. Federally insured credit unions must display the official NCUA insurance sign.
• Your coverage: Enter your accounts in the FDIC's EDIE estimator.

The Bottom Line

FDIC insurance protects up to $250,000 per depositor, per insured bank, for each ownership category, and it's automatic on deposit accounts. If your balances at one bank are close to the limit, check how your accounts are titled, consider spreading money across ownership categories or banks, and confirm your coverage with EDIE. For money you need to keep safe and easy to reach, such as an emergency fund, check that the account is at an FDIC-insured bank or a federally insured credit union. Browse our banking guides for more.

Frequently asked questions

Is FDIC insurance per account or per person?

Neither, exactly. The FDIC insures up to $250,000 per depositor, per insured bank, for each account ownership category. If you have two single accounts at the same bank, they're added together and insured up to $250,000 in total. A joint account or an IRA at that bank falls in a different category and is insured separately.

Are joint accounts FDIC insured up to $500,000?

A joint account owned by two people can be. The FDIC adds up each co-owner's share of all joint accounts at the bank and insures each co-owner up to $250,000. With two co-owners, that's up to $500,000 of joint-account coverage at one bank. Co-owners must be living people.

How can I insure more than $250,000 at one bank?

Use different ownership categories. A single account, a joint account, a retirement account such as an IRA and a trust account are each insured separately. Trust accounts are insured up to $250,000 per eligible beneficiary, up to $1,250,000 per owner per bank for five or more beneficiaries. The FDIC's EDIE tool can estimate your coverage.

What happens to my money if my bank fails?

If no other bank takes over the deposits, the FDIC pays depositors directly, and the FDIC says payments usually begin within a few days after the bank closes. Insured coverage includes principal plus any interest accrued through the date the bank closed.

How are credit union deposits insured?

Federally insured credit unions are covered by the NCUA's Share Insurance Fund, which insures individual accounts up to $250,000 and is backed by the full faith and credit of the United States. You can confirm a credit union is federally insured with the NCUA's Credit Union Locator.

Sources

1. FDIC: Your Insured Deposits
2. FDIC: Are My Deposit Accounts Insured by the FDIC?
3. NCUA: Share Insurance Coverage

This guide is general information, not personal advice. Your situation may differ, so consider talking with a qualified professional, such as a fiduciary financial adviser, CPA or licensed agent, before making a decision.