What bank accounts are FDIC-insured?
Quick insights
- The Federal Deposit Insurance Corporation (FDIC) insures deposit accounts like checking and savings accounts up to specific limits.
- Investment products such as stocks and mutual funds aren't covered by federal deposit insurance.
- The standard insurance amount is $250,000 per depositor for each account ownership category.
For many people, the whole point of depositing money in a bank is to protect their funds. Whether you're saving for a down payment or managing daily expenses, understanding how your funds are safeguarded might help offer some peace of mind. You might wonder what bank accounts are FDIC-insured. Let's explore which accounts are covered and how much the federal government insures.
How federal deposit insurance works
The FDIC is an independent agency of the U.S. government. It was created in 1933Opens overlay during the Great Depression to help restore trust in the American banking system. Its primary purpose is to protect depositors if an insured bank fails. When you open an account at an FDIC-insured bank, your money is automatically protected up to the legal limit. You don't need to apply for or purchase this coverage, and you don't need to file a claim if a bank fails—the FDIC typically pays insurance within a few days.
A common misconception is that every single product offered by a bank is insured. In reality, FDIC insurance only covers specific types of deposit accounts. It might be helpful to know exactly where your money sits so you can be confident it's protected in a worst-case scenario.
What bank accounts are FDIC-insured?
If you're looking to keep your money safe, and not just stuff it under your mattress, you might consider sticking to traditional deposit products. The FDIC covers the money in these accounts, dollar-for-dollar, including any interest you've earned.
For example, if you have a certificate of deposit (CD) in your name alone with a principal balance of $210,000 and $4,000 in accrued interest, the full $214,000 is insured.
Here are the main types of accounts covered:
- Checking accounts: An FDIC-insured checking account is designed for daily spending and is fully covered up to the legal limits.
- Savings accounts: Whether you have a traditional or high-yield savings account, your deposited funds are protected.
- CDs: These time-bound deposits, known as CDs, are insured just like your regular savings accounts.
- Money market deposit accounts: These money market accounts often combine checking and savings features and are also eligible for federal coverage.
- Cashier's checks and money orders: Official items issued by the bank are also protected under this insurance.
Accounts and products not covered
While FDIC-insured banks offer a safe place for your cash, they also offer financial products that can carry risk. The FDIC doesn't insure investments, even if you purchased them through an insured bank. If the market drops or the investment loses value, the federal government won't replace those funds.
According to the FDICOpens overlay, some products that aren't covered include:
- Stock investments
- Bond investments
- Mutual funds
- Crypto assets
- Life insurance policies
- Annuities
- Contents of a safe deposit box
How much does the federal government insure bank accounts?
The standard FDIC insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.
Account ownership categories refer to how the account is held. For example, single accounts (owned by one person) are insured up to $250,000. Joint accounts (owned by two or more people) are insured up to $250,000 for each co-owner. This means a joint account with two owners is insured up to $500,000 at a single bank.
If you have more than $250,000, you might consider spreading your funds across different ownership categories or opening accounts at multiple insured banks to maximize your coverage.
Finding FDIC-insured banks
Before you choose a bank to deposit your money, it might be a good idea to verify that the institution is federally insured. Most insured banks display the official FDIC logo on their website, at their teller windows and on their digital apps.
If you're unsure, you might consider using the BankFind toolOpens overlay on the official FDIC website to look up the institution. Confirming this detail takes only a few minutes and can provide lasting peace of mind for your financial future.
The bottom line
Keeping your money in an insured bank may provide a safety net for your financial future. From an FDIC-insured checking account to a long-term CD, your deposits are typically protected up to federal limits. You might consider reviewing your current accounts to confirm your deposits are fully covered.
