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 activities go sour, what happens to your money? This page discusses how FDIC insurance works.

When you hold money in an FDIC insured account, you won’t lose your money if the bank fails. Note that you may have a major headache dealing with a bank failure, but FDIC insurance has historically worked quickly.

If you are covered by FDIC insurance, you don't need to make a run on the bank.

• What Happens in a Bank Failure?
• How Bank Runs Work

  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.

  • How Credit Unions Work
  • How NCUSIF Insurance Works
  FDIC insurance does not protect you against identity theft or unauthorized use of your bank account.
  • Stolen Debit Card Risk

  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 insurance limits are:

  • $100,000 per depositor
  • $250,000 in certain retirement accounts per depositor

  Note: The FDIC raised the limit to $250,000 per depositor in 2008 as a result of the mortgage crisis. The increased limit applies until at least December 31st, 2009.

  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 have more than $100,000 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.

  • Should FDIC Insurance Limits be Increased?
  • Manage and Maximize FDIC Coverage
  • CDARS - CD Protection Above FDIC Limits

  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.