FDIC insurance
Also known as: FDIC deposit insurance
The Federal Deposit Insurance Corporation insures US bank deposits up to $250,000 per depositor, per insured bank, per ownership category. The structural guarantee that makes savings, checking, money market, and CD accounts at insured banks effectively risk-free up to the limit.
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The FDIC is an independent federal agency created in 1933 that insures deposits at participating US banks. The insurance is funded by premiums the banks pay to the FDIC, not by taxpayer appropriations; in the event of a bank failure, the FDIC has multiple mechanisms (sale of the failed bank's assets to another bank, direct payout to insured depositors) to make insured depositors whole, typically within a few business days. Since the FDIC's founding, no insured depositor has lost a penny of insured funds at an FDIC-insured bank. The agency's track record is the structural reason US bank deposits at insured institutions are treated as essentially risk-free for retail savers.
The insurance limit is $250,000 per depositor, per insured bank, per ownership category. The three dimensions matter. "Per depositor" means an individual is insured up to $250,000 at each insured bank; if you have $400,000 spread across two insured banks ($250,000 at one and $150,000 at the other), you are fully insured. "Per insured bank" means each FDIC certificate counts separately — a depositor at Chase and at Wells Fargo gets coverage at each. "Per ownership category" means single accounts, joint accounts (which insure up to $250,000 per co-owner), revocable trust accounts, and certain other categories are separately insured. A married couple with a joint account and two individual accounts at the same bank can effectively be insured up to $1,000,000 at that single bank by structuring across categories.
Verifying that a bank is FDIC-insured is straightforward. The FDIC maintains a public database at fdic.gov that lists every insured bank and its certificate number. Online banks that operate without a branch network are typically partnerships with an underlying chartered bank that carries the FDIC certificate — a deposit at SoFi, for example, is held at SoFi Bank N.A. or one of its partner banks, each of which is FDIC-insured. For neo-banks and fintech products that are not themselves chartered banks, the insurance flows through a partner bank arrangement that you should verify before depositing. A product that does not clearly disclose its FDIC certificate number or insuring bank should be treated with caution.
FDIC insurance does not cover certain products even at FDIC-insured banks. Investments held at a bank's brokerage arm (mutual funds, stocks, bonds, annuities) are not FDIC-insured; they may be SIPC-protected at the brokerage level. Cryptocurrency held at a bank-affiliated platform is not FDIC-insured. Foreign currency deposits at most US banks are not FDIC-insured. Safe deposit box contents are not FDIC-insured. The insurance covers deposit products specifically: checking, savings, money market deposit accounts, and certificates of deposit. The distinction between deposit products and investment products is critical for understanding what is actually protected.
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- NCUA insurance The National Credit Union Administration's National Credit Union Share Insurance Fund insures deposits at federal credit unions up to $250,000 per share owner, per insured credit union, per ownership category — structurally identical to FDIC insurance, applied to credit union shares.
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- CD (Certificate of Deposit) A federally insured deposit product at a US bank or credit union where you commit funds for a fixed term — typically 3 months to 5 years — in exchange for a fixed APY. Early withdrawal triggers a penalty, usually 90 days to 12 months of interest depending on the term.
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