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FDIC Insurance

How FDIC Insurance Works


FDIC insurance protects you from losses if your bank goes belly-up. You think of the bank as a very safe place for your money, but banks loan your money out and invest it in a variety of ways. If those investments go sour, what happens to your money? This page discusses how FDIC insurance works. For more information on the FDIC in general, see Overview and History of the FDIC.

When you hold money in an FDIC insured account, you won’t lose your money if the bank fails. Dealing with a bank failure can be a major hassle, but FDIC insurance has historically worked very quickly.

If you are covered by FDIC insurance, you don't need to "make a run on the bank" or try to pull your insured funds out before the bank goes under.

What is Covered

FDIC insurance applies to all deposits at covered banks. This includes:

  • Checking accounts
  • Savings accounts
  • CDs
  • Money market accounts (but not money market funds)

FDIC insurance does not cover:

  • Safety deposit box contents
  • Investments such as mutual funds or stocks
  • Insurance products such as annuities
The items above are not considered deposits – even though you may have bought them while you were physically at the bank.

Credit unions are not covered by FDIC insurance. Instead they have NCUSIF protection.

FDIC insurance does not protect you against identity theft or unauthorized use of your bank account.

Coverage Limits

FDIC insurance is not unlimited. If you have too much money in the bank you may be leaving yourself open to risk. The basic FDIC covers up to $250,000 per depositor per bank.

These limits are separate for each bank that you have accounts at. In other words, you can increase the FDIC insurance coverage available to you by using multiple banks.

Note that you can potentially have more than $250,000 of coverage at one bank if the money is spread among various owners or "registrations." To figure out if your accounts are under FDIC insurance coverage limits, use the Electronic Deposit Insurance Estimator (EDIE) tool.

Your Account’s FDIC Insurance

You can find out if your bank is covered with the FDIC Bank Find tool.

Using FDIC insured banks is a good idea because you’ve got a safety net if the bank fails. Furthermore, banks are required to meet certain standards to qualify for FDIC coverage. This serves as preventative medicine that makes a problem less likely to occur in the first place.

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