During tough economic times, many people worry about the stability of the businesses and institutions they count on. In this environment, it’s good to know that your savings and checking accounts are fully insured by the federal government.

Here are five must-know facts about how FDIC insurance keeps your money safe:

1. The FDIC has your back

Bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), an independent government agency. Should a bank fail—meaning it can’t meet the demand for withdrawals—the FDIC steps in and covers your cash, including any interest you have earned, up to $250,000.

2. The $250,000 coverage limit applies to each depositor and ownership category

Ownership categories include single and joint accounts, as well as trusts and certain retirement accounts. And the deposits of each account holder are covered up to $250,000 at FDIC insured banks and financial institutions. So, what does that mean in practice? If you and your spouse have a joint savings account worth $500,000, the full amount would be insured because each of you is considered a separate depositor into that account. Likewise, a trust with three beneficiaries would be insured up to $750,000.

Moreover, if you and your spouse also had separate individual savings accounts, those, too, would be insured up to $250,000 each, since the accounts are in different ownership categories.

Keep in mind that all deposits that an account holder has in the same ownership category at the same bank are added together and insured up to the standard insurance amount. It is also important to remember this coverage applies to FDIC insured banks and financial institutions only. The FDIC’s online calculator makes it easy to know if your money is insured. Just enter your bank name and account information, and you’ll get a full report.

3. Many of your accounts are covered

The FDIC insures:

  • Checking and traditional savings accounts
  • Money market deposit accounts (MMDAs)
  • Certificates of deposit (CDs)
  • Certain holdings in tax-advantaged retirement accounts, such as when IRAs are invested in CDs

The premium for this insurance is paid by the bank. It doesn’t cost you anything. Banks with FDIC coverage will have an FDIC sign at the branch or on their website. You can also ask at the bank, call the FDIC at 877-275-3342 or search on the FDIC website.

4. But the FDIC doesn’t cover everything

Account balances are not covered beyond the dollar-amount limits described above. Additionally, the FDIC does not cover:

  • Mutual funds
  • Individual stocks and bonds
  • Annuities and life insurance policies
  • The contents of a safe deposit box

That said, Treasury bonds, bills and notes are backed by the credit of the U.S. government.

5. If a bank fails, the FDIC steps in

In the unlikely event that a bank can’t meet all its withdrawals, that’s when the FDIC will step in and protect your accounts. It might transfer your money to another bank or simply write you a check for all your deposits and interest, generally within one day.

If you’d like to review your accounts and make sure you’re getting maximum protection, we can help. Make an appointment at your branch today. Call us at 800-724-2440 or set up an appointment online.


This article is for informational purposes only. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. Please consult with the professionals of your choice to discuss your situation.


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