How does FDIC insurance work?

The FDIC (Federal Deposit Insurance Corporation) insures deposits at FDIC-member banks up to $250,000 per depositor, per FDIC-insured bank, per ownership category. If an insured bank fails, the FDIC pays depositors up to this limit — either by opening an account at another bank or by sending a check. The FDIC has insured deposits since 1933; no depositor has ever lost a cent of insured funds in an FDIC-insured bank failure.

What counts as an ownership category for FDIC insurance?

FDIC insurance ownership categories: 1) Single accounts (individual accounts owned by one person) — $250,000 coverage; 2) Joint accounts (owned by two or more people) — $250,000 per co-owner ($500,000 for two owners); 3) Revocable trust accounts — $250,000 per beneficiary (up to 5 beneficiaries, $1.25M total per owner at one bank); 4) Certain retirement accounts (IRAs) — $250,000 per owner; 5) Irrevocable trust accounts; 6) Employee benefit plan accounts. Using multiple ownership categories at one bank multiplies your coverage.

How much FDIC coverage can I get at one bank?

At a single bank, a couple with named beneficiaries can get substantial coverage: Individual account (you): $250,000; Individual account (spouse): $250,000; Joint account: $500,000 ($250K each); Your IRA: $250,000; Spouse's IRA: $250,000; Your revocable trust with 5 beneficiaries: $1.25M; Spouse's revocable trust with 5 beneficiaries: $1.25M. Total potential coverage at one bank: $4 million or more, depending on account structure. Use the FDIC's Electronic Deposit Insurance Estimator (EDIE) at fdic.gov to calculate your specific coverage.

Are CDs FDIC insured?

Yes. Certificates of Deposit (CDs) at FDIC-insured banks are fully insured up to $250,000 per depositor, per bank, per ownership category — the same as savings and checking accounts. A CD is a deposit product and receives FDIC protection. If a bank fails while your CD is outstanding, the FDIC pays you the principal plus accrued interest up to the insured limit. Note: brokered CDs (purchased through a brokerage) are also FDIC insured, but the brokerage acts as the intermediary — confirm the underlying bank is FDIC-insured.

What is not covered by FDIC insurance?

The FDIC does not insure: investments (stocks, bonds, mutual funds, ETFs) even if purchased at a bank; annuities purchased at a bank; life insurance policies; contents of safe deposit boxes; losses due to theft or fraud (covered separately by bank policies); and deposits at non-FDIC-insured institutions. Brokerage accounts are covered separately by SIPC (up to $500,000 including $250,000 in cash) — not the FDIC.

FDIC Insurance Options — How to Maximize Your Coverage 2026

FDIC Insurance Options — How to Maximize Your Coverage

The FDIC insures $250,000 per depositor, per insured bank, per ownership category. Most Americans have well under this threshold in any single bank — but if you’re approaching or exceed $250,000, there are legitimate ways to expand coverage without moving to multiple institutions.

The Three Axes of FDIC Coverage

FDIC coverage is determined by three independent variables:

Per depositor — coverage is per person, not per account
Per FDIC-insured bank — the same person gets $250,000 at each bank
Per ownership category — multiple categories multiply coverage

FDIC Ownership Categories

Category	Coverage
Single (individual) accounts	$250,000 per owner
Joint accounts	$250,000 per co-owner (2 owners = $500,000)
Traditional and Roth IRAs	$250,000 per owner
Revocable trust accounts	$250,000 per beneficiary (up to 5 = $1.25M)
Irrevocable trust accounts	Varies by trust terms
Certain retirement plans (self-directed)	$250,000 per participant
Business entity accounts	$250,000 per entity

Coverage Example: A Couple at One Bank

Jane and John have deposits at First National Bank:

Jane’s individual account: $250,000 covered
John’s individual account: $250,000 covered
Joint checking account: $500,000 covered ($250K each)
Jane’s IRA: $250,000 covered
John’s IRA: $250,000 covered
Jane’s revocable trust (3 beneficiaries): $750,000 covered

Total at one bank: $2.25 million in FDIC coverage — from carefully structured accounts.

Using POD (Payable on Death) Beneficiaries

Adding beneficiaries to your accounts dramatically increases coverage:

A revocable trust account with 1–5 named beneficiaries: $250,000 x number of beneficiaries
Example: A savings account with you as owner and 4 named beneficiaries (e.g., spouse + 3 children): $1 million in coverage for that single account

Requirements for full beneficiary coverage:

Beneficiaries must be named living individuals (not a trust or charity for the enhanced coverage calculation)
The account must have a payable-on-death, in-trust-for, or similar designation

Using Multiple Banks

The simplest approach: open accounts at different FDIC-insured banks. Each bank provides $250,000 coverage on individual accounts. At five banks: $1.25 million in individual account coverage.

IntraFi network (CDARS/ICS): A single bank in the IntraFi network distributes your deposits across hundreds of member banks while you maintain one banking relationship. Provides millions in effective FDIC coverage through a single institution.

Check Your Coverage: FDIC EDIE Tool

The FDIC’s free Electronic Deposit Insurance Estimator (EDIE) at FDIC.gov allows you to enter your account details at any bank and see exactly how much is covered. Use this tool annually or whenever your bank balances change significantly.

What Is NOT Covered

Investment accounts (stocks, bonds, mutual funds, ETFs) — even at a bank
Annuities purchased at a bank
Safe deposit box contents
Life insurance policies

Brokerage investments are covered separately by SIPC (up to $500,000 including $250,000 cash) — not FDIC.

How to Insure Your Money When Banking Over $250,000 — strategies in depth
Is My Money Safe in a Bank? — FDIC history and safety
Ways to Insure Excess Deposits — advanced coverage options
Banking Basics Hub — complete banking guide

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

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