Guide · Safety · 5 min read
FDIC Deposit Insurance Explained
The Federal Deposit Insurance Corporation has protected bank depositors since 1933. Here's exactly how it works and what it covers.
- $250,000
- Per depositor, per category
- 1933
- FDIC founded
- $0
- Lost on insured deposits since 1934
- 1 day
- Typical access after a failure
The short answer
FDIC insurance protects up to $250,000 per depositor, per insured bank, per ownership category, and no depositor has ever lost insured funds since 1934.
- $250,000
- per ownership category
- $500,000
- a married couple via joint accounts
- 1 business day
- typical access after a closure
- 0
- insured dollars lost since 1934
Deposit accounts are covered; investment products like stocks, bonds, mutual funds, and annuities are not, even when bought at a bank.
What Is FDIC Insurance?
The FDIC is an independent US government agency created in 1933 after thousands of banks failed during the Great Depression. It insures deposits at member banks so that depositors don't lose their money if their bank fails.
What's Covered
- Checking accounts - including demand deposit accounts
- Savings accounts - including passbook savings
- Money market deposit accounts (MMDAs) - not money market mutual funds
- Certificates of deposit (CDs)
- Negotiable Order of Withdrawal (NOW) accounts
What's NOT Covered
- Stocks, bonds, mutual funds, or ETFs (even if purchased at a bank)
- Annuities or life insurance policies
- Safe deposit box contents
- Losses from investment fraud
- Cryptocurrency or digital assets
Coverage Limits by Account Type
The $250,000 limit applies per ownership category, not just per account. This means you can have more than $250,000 protected at a single bank by using different account categories:
- Single accounts - $250,000 per owner
- Joint accounts - the same per-owner ceiling applies per co-owner (married couple = $500,000 combined)
- Retirement accounts (IRAs, 401(k)) - the standard cap per owner
- Trust accounts - coverage extends per beneficiary at the standard cap
- Business accounts - the same per-account-category ceiling per business entity
What Happens When a Bank Fails?
When the FDIC closes a bank, it typically:
- Arranges for another bank to acquire the deposits (most common). Your accounts transfer seamlessly, you can still access your money the next business day.
- If no buyer is found, the FDIC mails checks directly to depositors for their insured balances, usually within 1-2 business days.
Frequently Asked Questions
How much does FDIC insurance cover?
$250,000 per depositor, per insured bank, per account ownership category. Married couples can have up to $500,000 covered using joint accounts.
Are all bank accounts FDIC insured?
Checking, savings, money market deposit accounts, and CDs are covered. Investment products like mutual funds, stocks, bonds, and annuities are NOT covered, even if purchased at a bank branch.
What happens when an FDIC-insured bank fails?
The FDIC typically arranges for another bank to take over accounts. If no buyer is found, the FDIC pays depositors directly. Insured deposits are usually available within one business day.
Understanding the Data
The information presented throughout this guide is informed by publicly available public records published by federal and state government agencies. Our database aggregates and standardizes these records to make them more accessible and easier to interpret for general audiences. When we reference specific statistics or trends, they are drawn directly from these authoritative sources unless explicitly noted otherwise.
It is important to understand the limitations of any large-scale data dataset. Records may contain errors from the original data collection process, some fields may be incomplete for older entries, and classification systems may have changed over time. Our analysis accounts for these factors by clearly labeling data vintage, flagging records with missing critical fields, and noting when temporal comparisons span methodology changes in the source data.
For readers who want to conduct their own research, we recommend going directly to the source whenever possible. federal and state government agencies provides detailed documentation on collection methodology, sampling frames, and known data quality issues. Our goal is not to replace primary sources but to make them more approachable and to highlight patterns that may not be immediately obvious when browsing raw records.
How We Analyze Data Records
Our analytical approach involves several steps designed to surface meaningful insights from large datasets. First, we clean and standardize the raw data, handling variations in naming conventions, date formats, and categorical labels. Then we compute summary statistics, distributions, and comparative benchmarks across relevant dimensions such as geography, time period, and category type.
Key metrics we examine include statistical records, geographic distributions, temporal trends. These indicators provide a multi-dimensional view of each entity in our database, allowing users to understand not just individual records but how they compare to peers, regional averages, and national benchmarks. We believe this contextual approach is far more valuable than presenting raw numbers in isolation.
Protect your deposits
Three steps to make sure your money is fully covered.
- Confirm your exact coverage with the FDIC EDIE estimator before parking a large balance. FDIC EDIE
- Check that your bank is FDIC-insured and review its health grade. Browse banks
- Spread balances above the limit across the safest banks nationwide. Safest banks
Not financial advice. Health grades are PlainBankData's interpretation of public FDIC Call Report data, not official FDIC ratings.