What FDIC Insurance Covers
The Federal Deposit Insurance Corporation (FDIC) is a US government agency created in 1933 after thousands of bank failures during the Great Depression. Its core function: protect depositors when a bank fails.
FDIC insurance automatically covers the following deposit products at any FDIC-insured bank:
- Checking accounts
- Savings accounts (including high-yield savings)
- Money market deposit accounts (bank MMAs — not money market funds)
- Certificates of deposit (CDs)
- Cashier's cheques and money orders issued by the bank
Coverage is automatic. You don't need to apply or pay for it — if your bank is FDIC-insured, your eligible deposits are covered.
Understanding the $250,000 Limit
The $250,000 limit is often misunderstood. The precise language matters: it's per depositor, per insured bank, per account ownership category.
| Scenario | FDIC Coverage |
|---|---|
| Single person, one bank, all individual accounts | $250,000 total |
| Married couple, joint checking account at one bank | $500,000 ($250k per person) |
| Single person, individual + IRA at same bank | $500,000 ($250k each — different categories) |
| Single person, $250,000 at Bank A + $250,000 at Bank B | $500,000 (separate banks) |
| Single person, $400,000 at one bank in one account category | $250,000 covered; $150,000 at risk |
Source: FDIC.gov. Use the FDIC's Electronic Deposit Insurance Estimator (EDIE) to calculate your exact coverage.
How Account Ownership Categories Work
This is the key to understanding how coverage can exceed $250,000 at a single bank. The FDIC insures each ownership category separately:
- Single/individual accounts: $250,000 per owner
- Joint accounts: $250,000 per co-owner (a joint account between two people covers $500,000)
- Retirement accounts (IRAs, Roth IRAs): $250,000 per owner — separate from individual account coverage
- Revocable trust accounts: $250,000 per beneficiary, up to 5 beneficiaries per owner
- Business accounts: $250,000 per corporation or partnership
A single person with individual accounts, an IRA, and a revocable trust account at the same bank could theoretically have well over $1 million covered, depending on the trust beneficiaries. The FDIC's free EDIE calculator at edie.fdic.gov can calculate your exact coverage for any combination of accounts.
What to Do If You Have More Than $250,000
The simplest solution: spread deposits across multiple FDIC-insured banks. $500,000 at Bank A and $500,000 at Bank B gives you full coverage at each institution.
There's also a service called the IntraFi Network (formerly CDARS) that allows large depositors to spread money across hundreds of banks through a single bank relationship, with full FDIC coverage on the entire amount. Some high-net-worth individuals and businesses use this for operational cash.
Using joint accounts is another tool — adding a spouse as a co-owner doubles coverage at the same bank from $250,000 to $500,000 in the joint account category.
What FDIC Does NOT Cover
This is critically important to understand. FDIC does not cover:
- Stocks, bonds, ETFs, mutual funds: even if held at a bank's brokerage arm. Brokerage accounts have separate coverage through SIPC (Securities Investor Protection Corporation), which protects against brokerage firm failure — not against investment losses.
- Annuities: not bank deposits, not FDIC-covered
- Life insurance products sold through banks
- Losses from investment decline: if your savings account balance falls due to fees or charges, FDIC doesn't cover that. It only protects against bank failure.
- Safe deposit box contents
How to Verify a Bank Is FDIC-Insured
Before depositing money at any bank — especially an online bank — confirm it's FDIC-insured. Two quick ways:
- Look for the FDIC logo on the bank's website (usually in the footer)
- Search the bank's name at FDIC BankFind
For credit unions, look for NCUA (National Credit Union Administration) membership — equivalent protection at NCUA.gov.
Deposit Protection in the UK, India, and Canada
UK — FSCS (Financial Services Compensation Scheme): The UK equivalent of the FDIC is the FSCS. It protects up to £85,000 per person per authorised firm for deposits. Temporary high balances (such as money from a home sale) can receive higher protection of up to £1 million for six months. This applies to banks, building societies, and credit unions authorised by the PRA (Prudential Regulation Authority). Check if your institution is covered at fscs.org.uk. Joint accounts are covered up to £170,000 (£85,000 per person).
India — DICGC (Deposit Insurance and Credit Guarantee Corporation): The DICGC, a subsidiary of the Reserve Bank of India, insures bank deposits up to ₹5 lakh (₹500,000) per depositor per bank. This limit was increased from ₹1 lakh in 2020. Coverage includes savings, fixed, current, and recurring deposit accounts. The DICGC covers deposits at commercial banks, small finance banks, and cooperative banks registered with the RBI. The key limitation: ₹5 lakh is a relatively modest figure compared to US/UK coverage relative to average deposit sizes — depositors with large FDs at smaller banks should be aware of the exposure. Details at rbi.org.in.
Canada — CDIC (Canada Deposit Insurance Corporation): The CDIC covers $100,000 per depositor per member institution, per deposit category. Like the FDIC, separate categories (deposits in a name, joint deposits, RRSPs, TFSAs, RRIFs) are each covered separately — meaning a single person could have well over $100,000 protected at one CDIC member. Coverage was updated in 2020 to remove the previous requirement that deposits must have a term of 5 years or less. Verify membership at cdic.ca.