Reviewed 15 August 2026 · Sourced from the FDIC, 12 CFR Part 330, the FDI Act and the NCUA
If your bank fails, the federal government makes you whole up to $250,000 — and you never had to sign up, pay a premium or file a claim.
The number most people remember is $250,000. The part they miss is the rest of the sentence: it is $250,000 per depositor, per insured bank, for each account ownership category. Two people at one bank can hold far more than $250,000 fully insured, and one person with everything in a single name can be uninsured well below what they assume. The difference is free to fix and takes an afternoon.
- The limit is $250,000 and has been since 2008. Its formal name is the standard maximum deposit insurance amount (SMDIA). Federal law lets the FDIC and NCUA boards jointly consider an inflation increase every five years, but that increase is discretionary and none has been made.
- The limit is per ownership category, not per account. Every account you hold alone at one bank is added together and covered to $250,000 in total. A joint account is a different category with its own coverage. Ten separate checking accounts in your name do not buy ten limits.
- Joint accounts effectively double the coverage. Each co-owner is insured up to $250,000 for their combined share of all qualifying joint accounts at that bank, so a $500,000 account owned equally by two people is fully insured.
- It covers deposits, and only deposits. Checking, savings, money market deposit accounts and CDs are in. Stocks, bonds, mutual funds, Treasury securities, annuities, life insurance, crypto and the contents of a safe deposit box are out — even when the bank sold them to you.
- Nobody’s taxes pay for it. Banks fund the Deposit Insurance Fund through assessments. The coverage is separately backed by the full faith and credit of the United States, so it does not depend on the fund’s balance.
- “FDIC insured” on an app is a narrower promise. Pass-through coverage responds when the partner bank fails, not when the app or the middleware company between you and the bank fails — and only if the bank’s records correctly show who owns what.
What FDIC insurance actually is
You have $4,000 in checking. On a Friday afternoon, the bank holding it fails. What happens to your $4,000?
Almost nothing happens to it. That is the whole point, and it is the least dramatic answer in American finance.
FDIC insurance is federal deposit insurance provided by the Federal Deposit Insurance Corporation, an independent agency created by the Banking Act of 1933 after a four-year run of bank failures wiped out ordinary people’s savings on a scale that is hard to picture now. If your bank carries the words Member FDIC, the coverage is already switched on. You did not apply for it. You do not pay a premium. If the bank fails, you do not file a claim — the FDIC comes to you.
The ceiling has a formal name: the standard maximum deposit insurance amount, or SMDIA. It is $250,000, defined at 12 U.S.C. § 1821(a)(1)(E) and administered under 12 CFR Part 330. It has been $250,000 since 2008, when it was raised from $100,000 during the financial crisis and later made permanent. Federal law lets the FDIC and NCUA boards jointly consider an inflation adjustment every five years — the last consideration date was 1 April 2025 — but the adjustment is discretionary, and the limit today is still $250,000.
Nobody’s taxes pay for this. The FDIC receives no congressional appropriations; insured banks pay assessments into the Deposit Insurance Fund, and that fund pays depositors. Separately, and this is the part that matters when you are worried, the insurance carries the full faith and credit of the United States government. The promise does not depend on how much happens to be sitting in the fund on the day your bank goes down.
Deposit insurance is the reason a bank failure is a paperwork event for you instead of a catastrophe — but only up to a limit, and the limit is measured in a way almost nobody reads carefully.
The phrase that decides everything
The FDIC’s own wording is $250,000 per depositor, per insured bank, for each account ownership category. People remember the number and drop the three qualifiers, which is exactly backwards — the qualifiers are where the coverage is won or lost.
Per depositor. The coverage belongs to a person, not to an account. Open six checking accounts in your own name at one bank and you have one $250,000 limit split six ways, not six limits.
Per insured bank. Each separately chartered insured institution brings its own limit. Note the word chartered: two brand names owned by the same holding company can share a single charter, in which case they share a single limit. The FDIC’s BankFind tool answers that question in about thirty seconds, and it is worth asking before you split a large balance between two names that turn out to be one bank.
For each account ownership category. This is the one that does the real work. The regulation sorts deposits into categories by how they are legally owned, and each category gets its own separate $250,000 for you at that bank.
| Ownership category | Coverage at one bank | Rule |
|---|---|---|
| Single accounts (yours alone) | $250,000 total | 12 CFR 330.6 |
| Joint accounts | $250,000 per co-owner | 12 CFR 330.9 |
| Trust accounts | $250,000 per eligible beneficiary, capped at 5 — so $1,250,000 maximum per owner | 12 CFR 330.10 |
| Certain retirement accounts (IRAs and similar self-directed plans) | $250,000 total | 12 CFR 330.14 |
| Employee benefit plan accounts | $250,000 per participant’s non-contingent interest | 12 CFR 330.14 |
| Business accounts (corporation, partnership, LLC) | $250,000 for the entity | 12 CFR 330.11 |
| Government accounts | Separate rules | 12 CFR 330.15 |
Two consequences fall straight out of that table. First, the account type is irrelevant — checking, savings, a money market deposit account and a CD all pour into the same bucket if they are owned the same way. Second, one household can carry well over a million dollars at a single bank with every dollar insured, using nothing but ownership structure that costs nothing to set up.
A money market deposit account at a bank is a deposit and is insured. A money market mutual fund is a security and is not, even when you bought it through the same bank on the same afternoon. The names are one word apart on purpose, and that word is worth checking on your own statement.
Worked example
The setup. Maria banks at one insured bank. She has a checking account in her name with $18,000, a savings account in her name with $212,000, and a savings account she shares equally with her brother holding $400,000. Nothing else. The balances are ours; the coverage rules are the FDIC’s.
| Account | Ownership category | Balance | Maria’s insured share |
|---|---|---|---|
| Checking — Maria only | Single | $18,000 | $18,000 |
| Savings — Maria only | Single | $212,000 | $212,000 |
| Savings — Maria and her brother | Joint | $400,000 | $200,000 (her half) |
Her two single accounts are added together: $18,000 + $212,000 = $230,000. That is under $250,000, so both are covered in full.
The joint account sits in a different category, so it starts from zero rather than stacking on top of the $230,000. Each co-owner is insured up to $250,000 for their share, and each share here is $200,000. Maria’s half is covered, her brother’s half is covered, and the whole $400,000 is insured.
Total on deposit at that bank: $230,000 + $400,000 = $630,000, every dollar of it insured.
Now change one number and watch it break. Suppose her personal savings held $262,000 instead of $212,000. Her single-category total becomes $18,000 + $262,000 = $280,000, and coverage stops at $250,000. $30,000 of her own money is uninsured — sitting there earning interest and doing nothing whatsoever to protect itself.
The fix costs nothing. Move $30,000 to a second insured bank and it is covered. Or leave the money where it is and change how it is owned — the same $30,000 inside a different ownership category at the same bank is fully insured, at the same rate, with the same debit card.
How to insure more than $250,000
If you are above the limit, you have three honest options and one trap.
1. Use a second bank
The simplest and the most reliable. A separately chartered insured bank brings a fresh $250,000 per category. Confirm the charter on BankFind first — two brands, one charter, one limit.
2. Use a different ownership category
A joint account with a spouse or an adult child insures each co-owner up to $250,000 for their share, so two names on one account cover $500,000. Coverage aggregates across all qualifying joint accounts at that bank, though, so three joint accounts do not buy three limits — each person still has one $250,000 joint limit at that institution.
3. Use the trust category
Since 1 April 2024 the FDIC merged revocable and irrevocable trusts into one trust accounts category with a single calculation: $250,000 per eligible beneficiary, counting a maximum of five beneficiaries. That is $1,250,000 per owner, per bank, at the ceiling. A payable-on-death designation on an ordinary savings account is enough to put it in this category, and naming a beneficiary is usually a form you can complete in the app.
The FDIC publishes a free calculator called EDIE that computes your exact coverage account by account. It is the authority, it is free, and it does not ask who you bank with.
The trap: assuming size means safety
Being uninsured is not a small-bank problem. In 2023 the second, third and fourth largest bank failures in U.S. history all involved institutions where the overwhelming majority of deposits sat above the limit. Insured depositors were made whole in every case. That is what the insurance is for — and it is also the reminder that the limit is the limit, not a suggestion, and that a household above it is carrying a risk it is not being paid to carry.
What it will not cover
FDIC insurance covers deposits. That word is doing all the limiting, and the bank lobby you bought the product in has nothing to do with it.
| Covered | Not covered |
|---|---|
| Checking accounts | Stocks and bonds |
| Savings accounts | Mutual funds, including money market mutual funds |
| Money market deposit accounts | U.S. Treasury securities |
| Certificates of deposit | Annuities and life insurance policies |
| Cashier’s checks and money orders issued by the bank | Crypto assets |
| Negotiable order of withdrawal accounts | The contents of a safe deposit box |
Read the right-hand column again. Every one of those can be sold to you inside an insured bank, by an employee of that bank, and none of them is insured by the FDIC. The market risk you took is yours. That is not a loophole — deposit insurance was never designed to guarantee investment returns — but the sales environment blurs it constantly, which is why federal rules require non-deposit products to be disclosed as not insured.
Credit unions are not FDIC insured, and that is fine
A federally insured credit union is covered by the National Credit Union Administration through the National Credit Union Share Insurance Fund, at the same $250,000 per owner, per category, and also backed by the full faith and credit of the United States. Different agency, different fund, same protection. What you want to see is a statement that the credit union is federally insured by NCUA; the equivalent lookup is the NCUA’s research tool.
“Member FDIC” on a website is an advertising statement, and it is easy to type. The FDIC’s separate official digital sign requirement — the one designed to make insured status visible online — was rewritten in a final rule published in January 2026 and does not reach its compliance date until 1 April 2027. Until then, the reliable check is not a logo. It is looking the institution up in FDIC BankFind or the NCUA’s credit union locator yourself.
What actually happens when a bank fails
Bank failures are announced on Friday afternoons on purpose, so the machinery has a weekend to run.
Most of the time the FDIC arranges a purchase and assumption: a healthy bank buys the failed one and assumes its deposits. Your account survives under a new name. Cards keep working, direct deposit keeps landing, and in the ordinary case you notice a letter and a logo change.
When no buyer is found, the FDIC runs a deposit payoff — it pays insured depositors directly, by check or by opening an account at another institution. The FDIC’s stated goal is to make insured deposit payments within two business days of the failure, and payments in a payoff usually begin within a few days of the closing. Accounts held in a trust or fiduciary capacity can take longer, because the FDIC has to establish who the beneficiaries are before it can compute the coverage.
What happens to the uninsured part
Nothing quick, and nothing guaranteed. A depositor above the limit receives a Receiver’s Certificate — a claim on the failed bank’s estate — and is paid dividends as the receiver sells off assets, over months or years, at whatever recovery rate the assets support.
Depositors are not at the back of that line. Under 12 U.S.C. § 1821(d)(11), the receiver pays administrative expenses first, then deposit liabilities, then general and senior creditors, then subordinated debt, then shareholders. Uninsured depositors sit in that second tier, ahead of bondholders and stockholders. Better than most creditors, and still nowhere near as good as being under the limit on Friday morning.
Insured: your money, in days, in full. Uninsured: a certificate, a queue and a recovery rate. That is the entire argument for spending an afternoon on ownership categories.
Why “FDIC insured” on an app is a different promise
A great many payment and savings apps are not banks. They hold your money at a partner bank that is insured, and describe the arrangement as “FDIC insured through” that bank. The mechanism is real — it is called pass-through insurance, and it lives at 12 CFR 330.5 and 330.7. It is also narrower than the marketing sounds, in two specific ways.
It responds to the bank failing, not the app failing. If the partner bank goes under, your money is insured as though you had deposited it there yourself. If the app collapses, or the middleware company sitting between the app and the bank collapses, the FDIC has not insured anything — no insured bank failed.
It only works if the records are right. Pass-through coverage requires that the fiduciary relationship be disclosed in the bank’s deposit account records and that each owner’s interest be ascertainable from those records. Fail that test and the whole pooled account is insured as if it belonged to the named account holder — the fintech — capped at a single $250,000 for everybody in it.
That is not hypothetical. When Synapse Financial Technologies failed in 2024, customers of apps that relied on its ledger were locked out of their money for months while the records were reconstructed. No insured bank had failed, so deposit insurance never came into play. The FDIC proposed a rule in October 2024 to tighten recordkeeping for exactly these custodial accounts; as of 2026 it has not been finalized, and its status on the regulatory agenda is long-term.
“Which insured bank holds my money, and is my name on the account at that bank?” Then look the bank up in BankFind yourself. If the answer is vague, or the app cannot name the institution, treat the balance the way you would treat cash in a company’s hands — because legally, that is closer to what it is.
What trips people up
Thinking the limit is per account. It is per depositor, per category. Splitting $400,000 across four savings accounts in your own name at one bank leaves $150,000 uninsured, exactly as if it were in one account.
Thinking two brands are two banks. A holding company can run several consumer brands on one charter. One charter, one set of limits. Check BankFind.
Assuming a brokerage sweep is the same thing. Cash swept from a brokerage into partner banks may be insured at those banks, and the securities in the account are protected by SIPC against the broker’s failure — which is a different agency covering a different risk and does not insure against investments losing value.
Forgetting the interest. Coverage is measured on principal and accrued interest at the moment of failure. A CD sitting at exactly $250,000 is slightly uninsured the day after it pays.
Letting a beneficiary designation lapse. The trust category is the cheapest coverage available, and it hinges on named eligible beneficiaries. A payable-on-death form that was never completed is $250,000 of unused protection.
Confusing FDIC with the deposit rate. Insurance says nothing about whether a bank is paying you a fair APY. Both matter. They are unrelated.
Frequently asked questions
How much money does the FDIC insure?
Up to $250,000 per depositor, per insured bank, for each account ownership category. That figure is the standard maximum deposit insurance amount, or SMDIA, and it has been $250,000 since 2008. Federal law lets the FDIC and NCUA boards jointly consider an inflation adjustment every five years, most recently on 1 April 2025, but the adjustment is discretionary and the limit remains $250,000.
Is the $250,000 limit per account or per person?
Per person, per bank, within each ownership category. All the accounts you own by yourself at one bank are added together and covered to $250,000 in total, whether that is one checking account or six. Opening more accounts in the same name does not add coverage. What does add coverage is a different ownership category, such as a joint account or an account with a payable-on-death beneficiary, or moving money to a separately chartered bank.
How do I insure more than $250,000 at one bank?
Three ways. Add a co-owner: each co-owner of a qualifying joint account is insured up to $250,000 for their share, so two people can cover $500,000. Use the trust category: naming eligible beneficiaries, including through a payable-on-death designation, covers $250,000 per beneficiary up to five, for a maximum of $1,250,000 per owner. Or use a second, separately chartered insured bank. The FDIC’s free EDIE calculator will compute your exact coverage before you move anything.
How long does it take to get your money if your bank fails?
For insured deposits, days. Most failures are resolved by a healthy bank assuming the deposits, in which case your account simply continues under a new name. Where the FDIC pays depositors directly, its stated goal is to make insured deposit payments within two business days of the failure, and payments usually begin within a few days of the closing. Accounts held in trust or fiduciary capacity can take longer because the FDIC has to establish the beneficiaries first.
What happens to deposits above the insured limit?
They are not covered by the insurance, but they are not worthless either. The depositor receives a Receiver’s Certificate and is paid dividends as the failed bank’s assets are sold off, over months or years, at whatever the assets recover. Federal law puts deposit liabilities ahead of general creditors, subordinated debt and shareholders in the payout order, so uninsured depositors are near the front of the line — but partial recovery, paid slowly, is the realistic expectation.
Are credit unions FDIC insured?
No, and they do not need to be. Federally insured credit unions are covered by the National Credit Union Administration through the National Credit Union Share Insurance Fund, at the same $250,000 per owner, per ownership category, and also backed by the full faith and credit of the United States. Different agency, different fund, equivalent protection. Look for wording that the credit union is federally insured by NCUA, and verify it in the NCUA’s own credit union locator rather than taking a logo at face value.
Related terms
Where to go next
- Open your banking app and write down which legal institution holds each balance, then look each one up in FDIC BankFind. Ten minutes, once.
- If any single-name balance is near $250,000, run it through EDIE before you move a dollar — the fix is often a beneficiary form, not a transfer.
- Size the cash this is protecting with the emergency fund calculator, and read How to Save Your First $1,000.
- Check what the insured account is actually paying with APY, then read Is your savings account losing to inflation?
- If a past account closure is keeping you out of the banking system entirely, start with ChexSystems, explained and second-chance bank accounts.
- Federal Deposit Insurance Corporation, Your Insured Deposits (ownership categories, what is and is not covered, worked coverage examples).
- Federal Deposit Insurance Corporation, Deposit Insurance At A Glance (the $250,000 limit stated as per depositor, per insured bank, for each account ownership category).
- Cornell Legal Information Institute, 12 U.S.C. § 1821 (§ 1821(a)(1)(E) defines the standard maximum deposit insurance amount as $250,000; § 1821(a)(1)(F) sets the five-year inflation consideration; § 1821(d)(11) sets the depositor preference payout order).
- eCFR, 12 CFR Part 330 — Deposit Insurance Coverage (§ 330.6 single accounts, § 330.9 joint ownership accounts, § 330.10 trust accounts, § 330.14 retirement and benefit plan accounts).
- Federal Register, Simplification of Deposit Insurance Rules, 87 FR 4455 (the single trust category effective 1 April 2024, $250,000 per beneficiary capped at five).
- Federal Deposit Insurance Corporation, Payment to Depositors (the two-business-day goal, purchase and assumption versus deposit payoff, the Receiver’s Certificate for uninsured balances).
- Federal Deposit Insurance Corporation, What We Do (no congressional appropriations; funded by assessments on insured institutions).
- eCFR, 12 CFR 330.5 and 12 CFR 330.7 (recordkeeping conditions for pass-through coverage on custodial and agency accounts).
- Federal Deposit Insurance Corporation, FDIC Proposes Deposit Insurance Recordkeeping Rule for Banks’ Third-Party Accounts (October 2024 proposal naming the Synapse failure; the rule remains unfinalized as of 2026).
- Federal Register, FDIC Official Signs and Advertisement of Membership, final rule published 29 January 2026 (digital sign compliance date of 1 April 2027).
- National Credit Union Administration, Share Insurance Coverage ($250,000 through the NCUSIF, backed by the full faith and credit of the United States).
The figures on this page are checked against the source that publishes them, and dated. Published rates move after the release named above — the linked source always carries the current number. This page explains a term; it does not recommend a product.