FDIC Insurance Limits

What is FDIC Insurance what are the insurance limits per account? Find out if your money is safe from bank closures and how to maximize your coverage.

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• No account activity or maintenance fees
• $500 minimum opening deposit
• FDIC insured

The annual percentage yield (APY) is accurate as of November 7, 2024 and subject to change at the Bank's discretion. Refer to product's website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Member FDIC

Have money in the bank? You'll want to be sure it's protected in case of bank closure.

That's where FDIC Insurance comes in.

Although bank closures are rare, it's important to know how you're covered. Learn about FDIC insurance limits below. Plus, find out how to maximize your coverage past the $250K limit.

What Does FDIC Insurance Mean?

The Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency that protects monetary deposit accounts — such as checking accounts, savings accounts, and CDs — in the event of a bank default or closure.

It does not protect investment vehicles like stocks, bonds, and mutual funds, nor does it protect deposits in the event of lost or stolen property.

For credit unions, the National Credit Union Administration (NCUA) provides the same deposit insurance as the FDIC for the same amounts.

What's Covered by FDIC Insurance (and What's Not)

FDIC Deposit Insurance Covers:^[1]

• Single bank account: Up to $250,000 per owner
  
• Joint bank account: Up to $250,000 per owner
  
• Certain retirement accounts (such as IRA and 401(k): Up to $250,000 per owner
  
• Revocable trust account: Owner insured $250,000 for each beneficiary
  
• Irrevocable trust account: $250,000 for the trust (more coverage available if requirements are met)
  
• Employee benefit plan account: $250,000 for the noncontingent interest of each plan participant
  
• Government account: Up to $250,000 per official custodian
  
• Corporation, partnership, or unincorporated association account: up to $250,000 per corporation, partnership, or unincorporated association

FDIC Deposit Insurance Does NOT Cover:^[2]

• Annuities
  
• Mutual funds or ETFs
  
• Stocks
  
• Bonds
  
• Life insurance policies
  
• U.S. Treasury Securities
  
• Municipal securities

Is the $250,000 Insurance per Account?

Not exactly. FDIC coverage is $250,000 per depositor, per FDIC-insured bank, per ownership category.

The depositor is the person whose name is on the account - meaning you, or you and your spouse (for a joint account).

The ownership category describes the type of account you have. Ownership categories include single accounts, joint accounts, revocable trusts, irrevocable trusts and more.

For example, a joint account you own with your spouse will be FDIC insured for $500,000 because there are two depositors listed on the account.

Each individual account does not receive $250K in coverage, but rather the owner of the account and per account type.

Are Joint Accounts Insured for $500,000?

Yes, if a joint account is owned by two people (i.e., depositors), it is insured for $500,000.

Some banks allow more than two people to share ownership of joint accounts, in which case the FDIC insurance on said account would be higher.

The highest deposit amount that can be insured with a single bank entity is $1 million.

Joint accounts carry some additional risk, so careful consideration should be made before opening a joint account.

For example, each party must have equal rights to make withdrawals and each party is individually responsible for the actions of the other. If your partner overdraws a joint checking account, you are on the hook to repay the bank.

How Can You Insure More than $250,000?

There are a number of reasons why you may want to insure more than $250,000 — even for a short period of time. You may have sold your home or business recently, received an inheritance, or heck, even won the lottery.

Here are four ways to receive more than $250,000 in FDIC deposit insurance:

1. Use multiple banks: To use this method, each bank must be a distinct entity. Some banks (such as Axos Bank) own other banks but are technically the same business entity. You can check this by checking their FDIC insurance numbers.

2. Open accounts in separate account categories: For example, if you own a small business, you can open personal and business checking accounts and receive up to $250,000 in FDIC insurance for each account.

3. Open a joint account: Joint accounts allow you to insure $250,000 for each account owner, up to $1 million at any individual bank entity.

4. Use MaxMyInterest: For a fee of 0.02% per quarter, MaxMyInterest will divide your large deposit into separate high-yield savings accounts in $250,000 increments.

Compare Bank Promotions for New Accounts

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Bank of America Advantage Banking - $300 Bonus Offer

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Expires 1/31/2025

• The $300 bonus offer is an online only offer and must be opened through the Bank of America promotional page.
• The offer is for new checking customers only.
• Offer expires 01/31/2025.
• To qualify, open a new eligible Bank of America Advantage Banking account through the promotional page and set up and receive Qualifying Direct Deposits* totaling $2,000 or more into that new eligible account within 90 days of account opening. Bank of America Advantage SafeBalance Banking® for Family Banking accounts are not eligible for this offer.
• Once all requirements are met, Bank of America will attempt to pay bonus within 60 days.
• Additional terms and conditions apply. See offer page for more details.
• *A Qualifying Direct Deposit is a direct deposit of regular monthly income – such as your salary, pension or Social Security benefits, which are made by your employer or other payer – using account and routing numbers that you provide to them.
• Bank of America, N.A. Member FDIC.

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U.S. Bank Smartly® Checking - Up to $450 Bonus

Earn up to $450 when you open a new U.S. Bank Smartly® Checking account and complete qualifying activities. Subject to certain terms and limitations. Offer valid through December 30, 2024. Member FDIC.

Earn up to $450 with a new Bank Smartly Checking account. Complete the following within 90 days of account opening:

• Enroll in online banking or the U.S. Bank Mobile App
• Make two or more direct deposits(s) totaling $2,000 to $4,999.99 to earn $250, $5,000 to $7,999.99 to earn $350 or $8,000 or more to earn $450.

Fund your new account within 30 days to start qualifying activities. Offer may not be available if you are an existing U.S. Bank customer or live outside of the U.S. Bank footprint.

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Expires 12/30/2024

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HSBC Premier - Earn Up to $2,500

Start an HSBC Premier relationship today. You'll enjoy premium banking with both local and global benefits and access to wealth solutions offered through HSBC Securities, (USA), Inc*.

You could earn $1,500 or $2,500 if you open a new, eligible HSBC Premier checking account from July 1, 2024 through November 22, 2024, and complete qualifying activities.

• Get a $1,500 Cash Bonus: Add New Money of $100,000 to $249,999 in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months.
• Get a $2,500 Cash Bonus: Add New Money of $250,000+ in deposit and/or eligible investment accounts within 20 days of opening your new checking account and maintain the Qualifying Balance for 3 full consecutive months.
• Cash Bonus will be deposited into your new checking account within 8 weeks of meeting all the offer requirements.

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What Happens to Your Money When a Bank Fails

If a bank cannot meet its financial obligations or loses substantial revenue from unexpected losses such as a crash in the stock market, it may be forced into bankruptcy.

When this happens, the FDIC will first look for a second bank to take over the assets of the bank facing closure.

If the FDIC cannot locate a bank willing to take on the assets of the failed bank, the FDIC will simply issue checks for the insured amount to each individual depositor. If this is the case, the FDIC typically pays insurance on the next business day, according to their website.

The Bottom Line

While bank closures are rare, they do happen. And when they do, it is often unexpected as the FDIC does not notify depositors in advance if a bank closure is about to take place. As a result, you want to make sure that 100% of your deposits are fully insured to ensure that you don't lose money.

By remaining informed about the different types of accounts you own, you can rest easy knowing that your money is safe.

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