Money market accounts at FDIC-member banks are FDIC insured up to $250,000 per depositor, per bank, per ownership category. This is the same federal protection that covers checking and savings accounts. If the bank fails, the FDIC steps in and you get your money back up to the limit — usually within a few business days.
What FDIC Insurance Covers
FDIC deposit insurance applies to:
- Checking accounts
- Savings accounts
- Money market accounts (deposit accounts at banks)
- Certificates of deposit (CDs)
- Negotiable order of withdrawal (NOW) accounts
What is NOT FDIC insured:
- Money market funds (mutual funds)
- Stocks, bonds, ETFs
- Annuities
- Cryptocurrency
- Safe deposit box contents
FDIC Coverage Limits for Money Market Accounts
The $250,000 limit applies per depositor, per bank, per ownership category. Ownership categories allow you to extend coverage significantly.
| Ownership category | Coverage |
|---|---|
| Single accounts | $250,000 per bank |
| Joint accounts (2 owners) | $500,000 per bank ($250K per co-owner) |
| IRA (retirement) accounts | $250,000 per bank (separate from other accounts) |
| Revocable trust accounts | Up to $250,000 per beneficiary (up to 5) |
Worked example: You and your spouse have a joint MMA with $480,000. Both names are on the account. Your combined FDIC coverage is $500,000 ($250,000 each) — your full $480,000 is protected at one bank.
If you have more than $250,000 as a single account holder: Spread it across multiple FDIC-insured banks (each institution gets its own $250,000 limit) or use a cash management account with a multi-bank sweep network.
Money Market Account vs. Money Market Fund — FDIC Coverage
This is the most important distinction to understand:
| Feature | Money Market Account | Money Market Fund |
|---|---|---|
| Type | Bank deposit account | Investment product (mutual fund) |
| Offered by | Banks and credit unions | Brokerages (Fidelity, Schwab, Vanguard) |
| Regulated by | FDIC / NCUA | SEC |
| FDIC insured | Yes (up to $250,000) | No |
| Principal guarantee | Yes (FDIC limit) | No — but designed to maintain $1.00/share |
| 2026 typical yield | 4.00%–4.50% APY | 4.50%–5.10% |
A money market fund is designed to maintain a stable $1.00 per share value, but this is not guaranteed. During the 2008 financial crisis, the Reserve Primary Fund “broke the buck” and fell below $1.00 per share. FDIC insurance provides a stronger guarantee for bank deposit accounts.
How to Verify a Bank Is FDIC Insured
Before depositing, confirm the institution is FDIC insured:
- Look for the FDIC official sign (physical or digital) on the bank’s website
- Use the FDIC BankFind tool at banks.data.fdic.gov
- Search by bank name — the tool shows current insurance status and history
For credit unions, verify NCUA membership at mycreditunion.gov.
What Happens If Your Bank Fails?
If an FDIC-insured bank fails:
- The FDIC takes over as receiver
- Insured deposits are protected immediately
- You typically gain access to your funds within 1–2 business days
- Deposits above $250,000 may be partially recovered from the bank’s assets — but are not guaranteed
The FDIC has covered all insured deposits in every bank failure since 1933 — over 3,000 failures.
For the broader safety analysis — beyond just FDIC insurance — see are money market accounts safe. For how money market accounts work, see how does a money market account work. For the full money market account hub, see money market hub.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy