How FDIC Insurance Works: How to Cover More Than $250,000 at One Bank, With Worked Examples

The $250,000 limit is not one limit per person. Once you understand ownership categories, you can see exactly how much of your cash is protected.

How much does FDIC insurance cover?

FDIC insurance covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category. That last part is the key. Because single accounts, joint accounts, retirement accounts and trust accounts are separate categories, one person or family can have far more than $250,000 fully insured at a single bank.

That wording comes straight from the Federal Deposit Insurance Corporation's guide to understanding deposit insurance. The FDIC is the U.S. government agency that insures deposits at member banks. Coverage is automatic when you open a deposit account at an FDIC-insured bank. You do not need to apply or pay for it.

The track record is strong. "Since the FDIC was founded in 1933, no depositor has lost a penny of FDIC-insured funds," the agency says. The words that matter in that sentence are "FDIC-insured funds." Money above the limits, or money in products the FDIC does not cover, does not get that promise.

This guide walks through what counts as a deposit, how each ownership category works and how to add it all up, with worked examples you can copy for your own accounts.

What does FDIC insurance cover, and what does it not cover?

FDIC insurance covers deposits. According to the FDIC's brochure, Your Insured Deposits, that includes checking accounts, NOW accounts, savings accounts, money market deposit accounts, certificates of deposit (CDs), and official bank items such as cashier's checks and money orders.

It does not cover investments, even if you bought them through your bank. The FDIC lists stocks, bonds, mutual funds, crypto assets, life insurance policies, annuities, municipal securities, and safe deposit boxes or their contents as not insured. The FDIC says this holds "even if they were purchased at an insured bank."

U.S. Treasury bills, notes and bonds are not FDIC-insured either. The FDIC notes they are backed by the full faith and credit of the U.S. government instead, which is a separate kind of protection.

A common mix-up involves money market accounts and money market funds. A money market deposit account at a bank is a deposit, so it is FDIC-insured. A money market mutual fund at a brokerage is an investment, so it is not. Our guide to choosing a bank account covers how to confirm that a bank is FDIC-insured. The FDIC's BankFind tool and its phone line, 1-877-ASK-FDIC (1-877-275-3342), can also confirm it.

What are the FDIC ownership categories?

The FDIC lists these account ownership categories: single accounts, joint accounts, certain retirement accounts (such as IRAs), trust accounts, employee benefit plan accounts, corporation, partnership and unincorporated association accounts, and government accounts. Most households only need to know the first four.

Single accounts are owned by one person with no named beneficiaries. All of your single accounts at one bank are added together and insured up to $250,000 in total. Having a checking account, a savings account and a CD in your own name does not give you three limits.

Joint accounts are owned by two or more people with no named beneficiaries. Each co-owner is insured up to $250,000 for their share of all joint accounts at the same bank, and the FDIC assumes equal shares unless the bank's records say otherwise. So two co-owners can have up to $500,000 in joint accounts fully insured. To qualify, all co-owners must be living people with equal rights to withdraw, and each must have signed the account paperwork or be shown as a co-owner in the bank's records.

Certain retirement accounts include traditional IRAs, Roth IRAs, SEP IRAs and SIMPLE IRAs held as bank deposits, along with some self-directed plans. They are added together and insured up to $250,000 per owner, per bank. Naming beneficiaries on an IRA does not raise that amount. This only applies to IRA money held in bank deposits, such as an IRA CD. IRA money invested in stocks or funds is not FDIC-insured.

Trust accounts, which include revocable and irrevocable trusts and payable-on-death accounts, follow a rule that took effect April 1, 2024. Coverage is $250,000 per eligible beneficiary, per owner, up to a maximum of $1,250,000 per owner at one bank when five or more beneficiaries are named. The FDIC's deposits at a glance page gives the formula: number of owners, times number of distinct beneficiaries, times $250,000. Eligible beneficiaries are living people and qualifying charities or nonprofits. Our guide to FDIC coverage for trust accounts goes deeper on trusts.

Worked example 1: a single saver with $300,000 at one bank

Maria has $40,000 in checking, $110,000 in savings and a $150,000 CD at the same bank, all in her own name with no beneficiaries. All three are single accounts, so they are added together: $40,000 plus $110,000 plus $150,000 equals $300,000.

The single-account limit is $250,000. So $250,000 is insured and $50,000 is not. Opening the CD at a different branch of the same bank would not help. The FDIC says funds deposited in separate branches of the same insured bank are not separately insured.

Maria has several simple ways to cover the extra $50,000. She could move it to a different FDIC-insured bank, where it would get its own $250,000 limit. Or she could add a payable-on-death beneficiary to one account, which moves that money into the trust category. With one eligible beneficiary, such as her brother, that account could be insured up to $250,000 on its own, separate from her single accounts.

Worked example 2: a married couple with $1.5 million at one bank

Sam and Lee are married and bank at one FDIC-insured bank. Here is how they could have $1.5 million fully insured there.

Sam has $250,000 in a single account and Lee has $250,000 in a single account. That is $250,000 each, or $500,000, in the single category.

They share a joint savings account with $500,000. As two co-owners, each is insured for $250,000 of joint money, so the full $500,000 is covered in the joint category.

Each also has an IRA invested in CDs at the bank, with $250,000 in each. That is $250,000 per owner, or $500,000, in the retirement category.

Add it up: $500,000 single, plus $500,000 joint, plus $500,000 retirement, equals $1.5 million, all insured at one bank. If they each had a trust account naming beneficiaries, they could add more on top of that.

Now a warning version. Suppose they instead kept all $1.5 million in that one joint account. The joint limit would cover only $500,000, leaving $1 million uninsured. Same family, same bank, same total, but a very different result just because of how the accounts are titled.

Worked example 3: a parent with a trust account and three children

Pat has a revocable living trust that holds $800,000 in deposits at one bank and names Pat's three children as equal beneficiaries. Under the trust rule, coverage is $250,000 per eligible beneficiary for each owner: one owner times three beneficiaries times $250,000 equals $750,000.

So $750,000 is insured and $50,000 is not. If Pat named a fourth eligible beneficiary, such as a grandchild or a qualifying charity, coverage would rise to $1 million. With five or more beneficiaries, it would reach the $1,250,000 cap per owner at that bank. A beneficiary counts only once per owner, even if they are named on several trust accounts at the same bank.

What happens if a bank fails?

When an insured bank fails, the FDIC usually tries to have another bank take over its deposits, so customers keep access to their money. If no bank takes over, the FDIC pays depositors directly. Its brochure says such payments, usually made by check, "usually begin within a few days after the bank's closing."

Money above the limits is a different story, because the insurance promise does not cover it. That is why it is worth checking your coverage before anything goes wrong, not after.

How can you check your own coverage?

Start by listing every deposit account you have at each bank, along with how each is titled: in your name alone, jointly, as an IRA, or with payable-on-death beneficiaries. Group them by bank, then by category, and compare each group with the limits above. Remember that banks under one parent company may share one charter, which would make them one bank for insurance purposes, while separately chartered banks are insured separately.

The FDIC also offers a free online calculator called EDIE, the Electronic Deposit Insurance Estimator. It shows, bank by bank, how the rules apply to your accounts, and it lets you print a report. The FDIC notes that EDIE is only for deposits, not investments such as stocks, bonds, mutual funds, annuities or crypto.

If your cash is spread across several CDs, such as in a CD ladder, add up every CD at each bank, including interest, when you check your totals. Insurance limits apply to your balance, and growing interest can push a balance that was once under the limit over it.

Finally, check the FDIC's website for current rules before making big moves. The core $250,000 limit has been in place for years, but details such as the trust rules have changed before, as they did in 2024.