FDIC insurance is the reason a checking account at an insured bank is treated as close to riskless: if the bank fails, the Federal Deposit Insurance Corporation pays you back up to the limit, and it has done so for every insured dollar since coverage began on January 1, 1934. The limit is easy to quote and easy to misread. It applies per depositor, per bank and per ownership category, so the same person can be fully covered for $250,000 or for several million dollars at one bank depending on how the accounts are titled. This guide explains the categories, the 2024 trust rule, what is left out, how payouts work and how to check your own position.
What are the FDIC insurance limits?
The standard limit is $250,000 per depositor, per insured bank, per ownership category (FDIC, as of Nov 1, 2026), counting principal plus any interest accrued up to the day the bank closes.
Each part of that sentence matters:
- Per depositor. The limit belongs to the person or entity that owns the money, not to the account. Opening three savings accounts in your own name at the same bank does not triple your coverage.
- Per insured bank. Deposits at separately chartered banks are insured separately. Branches of the same bank are not, and neither are different brand names or apps that hold money at the same charter.
- Per ownership category. Single, joint, certain retirement, trust, employee benefit plan, business and government accounts are each insured separately, as long as each category's rules are met.
Covered products are deposits: checking, savings, money market deposit accounts, CDs, and official items such as cashier's checks and money orders issued by a bank. Interest counts toward the limit, so a single-name CD of $247,800 that has accrued $3,900 by the failure date is $251,700 in the single category, leaving $1,700 uninsured.
The FDIC is an independent federal agency funded by assessments on banks rather than by appropriations, and its insurance is backed by the full faith and credit of the US government. Coverage is automatic; there is nothing to apply for.
Which ownership categories get separate coverage?
Seven categories each get their own $250,000, provided the account meets that category's rules; the four that matter most for households are single, joint, retirement and trust.
| Category | What it includes | How the limit applies |
|---|---|---|
| Single | Accounts in one person's name with no beneficiaries, sole proprietorship accounts, UTMA custodial accounts, decedent's estate accounts | All single accounts of one owner at one bank combined, up to $250,000 |
| Certain retirement | Traditional, Roth, SEP and SIMPLE IRAs; self-directed 401(k), Keogh and profit-sharing plans; 457 plans | All of one person's qualifying retirement deposits combined, up to $250,000; naming beneficiaries adds nothing |
| Joint | Accounts owned by two or more living people with equal withdrawal rights and no beneficiaries | Each co-owner's shares of all joint accounts combined, up to $250,000 per co-owner |
| Trust | Payable-on-death (POD) and in-trust-for accounts, living trusts, irrevocable trusts | $250,000 per owner for each eligible beneficiary, up to five |
| Employee benefit plan | Deposits of pension, defined-benefit and other plans that are not self-directed, including 403(b) deposits | Passes through to each participant's share, up to $250,000 each |
| Business | Corporations, LLCs, partnerships and unincorporated associations such as churches or homeowners' associations | $250,000 per entity in total, however many accounts or members |
| Government | Accounts of federal, state, county, municipal and tribal government units | Separate rules that depend on account type and whether the unit is in-state |
Three details trip people up. A power of attorney on a single account does not turn it into a joint account. Shuffling the order of names on joint accounts, or switching "and" for "or" in the title, adds no coverage. And a single account with a named beneficiary is no longer a single account at all: it moves into the trust category.
How did the April 2024 trust rule change coverage?
Since April 1, 2024, all trust deposits an owner holds at one bank, revocable and irrevocable, are combined and insured at $250,000 per unique eligible beneficiary.
The cap is $1,250,000 per owner, per bank, for trust deposits naming five or more eligible beneficiaries. Before the change, revocable and irrevocable trusts followed different rules, irrevocable coverage depended on contingencies in the trust document, and owners with more than five beneficiaries could in some cases be insured above $1.25 million. The rule now applies to existing and new accounts alike, including CDs bought before April 2024.
What has to be true for the coverage to count:
- A formal trust account's title at the bank must show the trust relationship, for example with the word "trust" in the account name. For POD accounts, the POD label is no longer required, but the beneficiaries must be named in the bank's records.
- Each beneficiary must be a living person, a charity or a nonprofit that qualifies under IRS rules.
- A beneficiary counts once per owner, however many of that owner's trust accounts name them.
- With two owners, each owner's coverage is calculated separately, so a couple's joint living trust naming three children can be insured up to $1.5 million.
- Coverage is the same whatever share each beneficiary is allotted; an equal or a 90/10 split gives the same result.
How much is covered in common joint, trust and retirement setups?
The table works through typical setups at a single bank, assuming no other accounts in the same category at that bank.
| Setup at one bank | Category | Balance | Insured | Uninsured |
|---|---|---|---|---|
| Two spouses: joint savings of $320,000 plus a joint CD of $160,000 | Joint | $480,000 | $480,000 | $0 |
| The same spouses open a $90,000 joint checking account | Joint | $570,000 | $500,000 | $70,000 |
| A parent and two adult children on one joint CD | Joint | $720,000 | $720,000 | $0 |
| One owner, POD account naming two children | Trust | $600,000 | $500,000 | $100,000 |
| That owner adds a $150,000 living trust naming the same two children and a charity | Trust, combined | $750,000 | $750,000 | $0 |
| Two owners, joint living trust naming three children | Trust | $1,400,000 | $1,400,000 | $0 |
| One owner, irrevocable trust naming seven grandchildren | Trust | $1,500,000 | $1,250,000 | $250,000 |
| One person's traditional IRA CD of $210,000 plus Roth IRA savings of $55,000 | Certain retirement | $265,000 | $250,000 | $15,000 |
| One person's IRA naming three beneficiaries | Certain retirement | $400,000 | $250,000 | $150,000 |
The fifth row shows the trust rule's quirk: adding a charity as a third beneficiary raised the owner's limit from $500,000 to $750,000 and covered both accounts. The last row shows its opposite: beneficiaries on an IRA add nothing.
Worked example: A retired couple with $1,105,100 at one bank
- Joint savings, $300,000: each spouse's share is $150,000, so it is fully insured
- His single CD, $200,000 plus $3,100 of accrued interest: fully insured in his single category
- Her single savings, $60,000: fully insured in her single category
- His IRA CD, $262,000: $250,000 insured, $12,000 uninsured
- Joint POD account naming their two children, $280,000: each spouse's $140,000 share sits under a $500,000 trust limit, so it is fully insured
Total insured: $1,093,100 of $1,105,100. The only gap is the IRA, and naming more beneficiaries on it would not help; moving at least $12,000 of it to an IRA at a different bank at the CD's maturity would.
Worked example: When a POD beneficiary dies
A widower keeps $700,000 in a POD account naming his three grandchildren, so his limit is $750,000 and the account is fully insured. If one grandchild dies, his limit drops to $500,000 immediately, leaving $200,000 uninsured until he names another eligible beneficiary or moves money. The FDIC gives no grace period for a beneficiary's death. When an account owner dies, by contrast, the accounts stay insured as if the owner were alive for six months.
How to restructure accounts deliberately, across categories and banks, is covered in how to insure more than $250,000.
What does FDIC insurance not cover?
FDIC insurance covers deposits when an insured bank fails, and nothing else, even when an uninsured product is sold inside a bank branch.
- Investments: stocks, bonds, mutual funds including money market funds, annuities, life insurance policies, municipal securities and crypto assets.
- US Treasury bills, notes and bonds: not insured by the FDIC, but backed directly by the full faith and credit of the US government. The trade-offs are covered in are Treasuries risk-free?
- Safe deposit boxes and their contents, which are not deposits.
- Theft, fraud and bank errors: these are handled by the bank's own insurance and by consumer protection law, not by deposit insurance.
- Money held by a non-bank company: a payment app, broker or fintech is not an insured bank, so its failure does not trigger FDIC insurance. Pass-through coverage applies only if the money actually sits at an insured bank in properly titled accounts and that bank fails, as cash sweep accounts explained shows.
Securities held at a failed brokerage fall under a different program with different rules; see FDIC vs SIPC.
How do FDIC payouts work, and how fast?
The FDIC's goal is to pay insured deposits within two business days of a failure, usually by transferring the accounts to a healthy bank.
In the most common method, a purchase and assumption, another bank takes over the insured deposits and the failed bank's branches typically reopen the next business day under the new owner, with checks usually clearing as normal. If no buyer is found, the FDIC pays depositors directly by check, usually starting within a few days. Interest stops accruing at closing, and an acquiring bank may reset rates, in which case depositors can withdraw without penalty.
Some deposits take longer because the FDIC needs documents first: formal trust accounts, deposits placed by a broker or other fiduciary, and employee benefit plan deposits. For broker-placed deposits, the FDIC pays the fiduciary, which then pays its customers.
Money above the limit is a claim on the failed bank. The depositor receives a receiver's certificate and is paid as the bank's assets are sold, which can take years and may not repay everything. When Community Bank and Trust – West Georgia failed on May 1, 2026, one of six FDIC-listed failures so far this year, about $27 million of its $268 million in deposits was uninsured. The acquiring bank reopened the branches on May 4, the FDIC said it might pay uninsured depositors an advance dividend later, and holders of brokered deposits were told to contact their broker.
In March 2023, regulators used a systemic risk exception to protect all depositors of two large failed banks, insured or not. That was a discretionary decision for those failures, not part of the coverage rules, so planning should assume only the insured amount is protected.
How does NCUA share insurance compare?
Credit union deposits, called shares, are insured by the National Credit Union Administration on terms that closely mirror the FDIC's.
The standard amount is $250,000 per share owner, per insured credit union, for each account ownership category. The National Credit Union Share Insurance Fund, created by Congress in 1970, is backed by the full faith and credit of the US government, and the NCUA says no one has lost a penny of insured deposits at a federally insured credit union. Individual, joint, IRA and Keogh, and trust accounts are insured separately, much as at a bank.
Two differences are worth knowing. First, the NCUA's version of the simplified trust rule, approved in September 2024, takes effect on December 1, 2026, merging trust accounts into one category at $250,000 per beneficiary, up to $1,250,000 per owner. Second, some state-chartered credit unions are privately insured rather than federally insured, and private insurance does not carry the government's backing. The NCUA's Credit Union Locator shows which kind a credit union has, and its Share Insurance Estimator on MyCreditUnion.gov works like the FDIC's.
How to check your coverage with EDIE
A coverage check needs only a list of your accounts, and it is worth repeating whenever balances, beneficiaries or banks change.
Confirm the bank is insured
Look up the bank's legal name in the FDIC's BankFind tool. If an app or online brand holds your money, find out which chartered bank actually holds the deposits, because several brands can share one charter.
List every account at that bank
Include CDs, accrued interest and accounts held through apps or brokers. Note the owner, any beneficiaries and the exact title of each account.
Group the accounts by ownership category
Put single, joint, retirement and trust accounts in separate groups, and record the number of unique eligible beneficiaries for each trust owner.
Run the numbers in EDIE
Enter each group into the FDIC's Electronic Deposit Insurance Estimator at edie.fdic.gov. It shows the insured and uninsured amount per owner and per category.
Ask the FDIC if anything is unclear
Call 1-877-ASK-FDIC for questions EDIE cannot settle, such as complex trusts or employee benefit plans.
High-yield savings and CDs are often where balances creep over the limit as interest compounds; how high-yield savings accounts work and what is a CD? explain those products, and the compound interest calculator shows how fast a balance near $250,000 can cross it.
What are the risks of relying on coverage you have not checked?
The usual failure is not the FDIC refusing to pay but a depositor discovering, after a closure, that the accounts never fit the category they assumed.
- Shared charters. Two brands, or a bank and an app, may be the same bank for insurance purposes, cutting your coverage in half.
- Mergers. When banks merge, deposits stay separately insured for at least six months, and CDs until their first maturity after that. Then the balances combine.
- Deaths and beneficiary changes. A beneficiary's death cuts coverage at once; an owner's death starts a six-month clock.
- Title errors. A living trust account without "trust" in its title, or a POD account whose beneficiaries are missing from the bank's records, can fall back into the owner's single category.
- Interest creep. Balances just under the limit drift over it as interest posts.
- Middlemen. If a broker, app or other fiduciary placed the money, the FDIC relies on its records and is not responsible if it never opened the account or kept poor documentation.
- Slow money above the limit. Uninsured amounts are repaid from asset sales, sometimes years later, and sometimes only in part.
None of these risks touches the safety of insured funds once coverage is confirmed. They are reasons to run the check rather than assume the answer. For the wider set of options, including Treasuries and money market funds that sit outside deposit insurance, see the safe investments hub and the Treasury bill calculator.