When you open a deposit account, such as a savings orchecking account, you may see a notice stating the account is FDIC-insured.
The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government that protects and reimburses your deposits up to the legal limit of $250,000 if your FDIC-insured bank fails.
Though it's not very common, a bank can fail when it takes on too much risk, such as extending credit to borrowers who wind up defaulting. When this happens, the bank goes belly up, putting its customers' assets in jeopardy. But thanks to FDIC insurance, you can receive reimbursem*nt up to the maximum amount so your funds aren't lost for good. However, in the case of Silicon Valley Bank and Signature Bank, the government stepped in to make all depositors whole, beyond the usual insurance limit.
FDIC insurance covers checking, savings and other deposit accounts up to a standard amount of $250,000 — but there are a few caveats. Namely, the $250,000 limit is per account holder, not per account, as you might think.
But before we dive into insurance limits,here are the basics about FDIC insurance you need to know.
What's covered by FDIC insurance?
The FDIC covers many common deposit accounts but doesn't insure investment accounts. Here are the following types of covered accounts:
- Checking accounts
- Savings accounts (including high-yield savings accounts)
- Negotiable order of withdrawal (NOW) accounts
- Money market deposit accounts (MMDAs)
- Time deposits such as certificates of deposit (CDs)
- Cashier's checks, money orders and other official items issued by a bank
Meanwhile, these accounts are ineligible for FDIC coverage:
- Stock investments
- Bond investments
- Mutual funds
- Crypto assets
- Life insurance policies
- Annuities
- Municipal securities
- Safe deposit boxes or their contents
- U.S. Treasury bills, bonds or notes (These investments are backed by the full faith and credit of the U.S. government).
FDIC-insured checking and savings accounts
Most checking accounts and savings accounts provided by major banks offer standard FDIC insurance. Lots of these checking accounts also come withno monthly maintenance fees, which can save you up to $15 a month.
As for savings, going with an FDIC-insuredhigh-yield savings accountcan earn you more than 12 times the national interest rate.
Here are some of CNBC Select's top-rated checking and savings accounts.
Capital One 360 Checking®
Capital One Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10%
Free ATM network
70,000+ Capital One®, MoneyPass andAllpoint® ATMs
ATM fee reimbursem*nt
None
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
Ally Bank Spending Account
Ally Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10% less than $15,000 minimum daily balance; 0.25% over $15,000 minimum daily balance
Free ATM network
43,000+ Allpoint® ATMs
ATM fee reimbursem*nt
Up to $10 per statement cycle
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
LendingClub High-Yield Savings
LendingClub Bank, N.A., Member FDIC
Annual Percentage Yield (APY)
5.00%
Minimum balance
No minimum balance requirement after $100.00 to open the account
Monthly fee
None
Maximum transactions
None
Excessive transactions fee
None
Overdraft fees
N/A
Offer checking account?
Yes
Offer ATM card?
Yes
Terms apply.
Marcus by Goldman Sachs High Yield Online Savings
Goldman Sachs Bank USA is a Member FDIC.
Annual Percentage Yield (APY)
4.40% APY
Minimum balance
None
Monthly fee
None
Maximum transactions
At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account
Excessive transactions fee
None
Overdraft fee
None
Offer checking account?
No
Offer ATM card?
No
Terms apply.
UFB Portfolio Savings
UFB Portfolio Savings is offered by Axos Bank ® , a Member FDIC.
Annual Percentage Yield (APY)
Up to 5.15%APY on any savings balance; add UFB Freedom Checking and meet checking account qualifications to get an additional up to0.20%APY on savings
Minimum balance
$0, no minimum deposit or balance needed for savings
Fees
No monthly maintenance or service fees
Overdraft fee
Overdraft fees may be charged, according to the terms; overdraft protection available
ATM access
Free ATM card with unlimited withdrawals
Maximum transactions
6 per month; terms apply
Terms apply.
Read our UFB Portfolio Savings review.
You can find out if your banking institution is insured with the FDIC's BankFind tool.
FDIC coverage limits
The standard coverage limit is $250,000 per account owner, per each of the ownership categories we include in the table below.
That means you could technically qualify for more than $250,000 in coverage if you hold accounts in more than one ownership category, either as an individual or with a joint account holder.
For instance, a couple with a joint checking account that's FDIC-insured can receive insurance for up to $500,000 for the same shared account ($250,000 per co-owner). And if each of you opens your own individual checking account separately (under the category of "single account") it would also have its own $250,000 coverage on top of your joint checking's $500,000 coverage.
You can also see that trusts, benefit plans and other accounts factor in whether there are beneficiaries, participants or custodians connected to them.
Here's a breakdown of the FDIC coverage broken up by type of account owner.
FDIC deposit insurance coverage limits
| Type of account owner category | Coverage limit |
|---|---|
| Single accounts | $250,000 per owner |
| Joint accounts | $250,000 per co-owner |
| Certain retirement accounts | $250,000 per owner |
| Revocable trusts | $250,000 per owner per unique beneficiary |
| Corporation, partnership and unincorporated association | $250,000 per corporation, partnership or unincorporated association |
| Irrevocable trusts | $250,000 per unique beneficiary that's entitled to the account |
| Employee benefit plans | $250,000 per plan participant that's entitled to the account |
| Government accounts | $250,000 per official custodian (more coverage may be available) |
However, a few accounts, such as the Wealthfront Cash Account (a basic no-fee checking option), can provide even higher FDIC insurance limits by spreading, or sweeping, your funds across multiple banks. In the case of Wealthfront Cash, accounts are FDIC-insured up to $2 million by allocating deposits across up to eight partner banks.
Bottom line
There's no reason to panic and rush to withdraw money from your bank. Most financial institutions are covered by FDIC insurance and the majority of Americans have less than the $250,000 insurance limit in a specific deposit account. The easiest way to boost your FDIC coverage is to spread your money across multiple banks. Or, you can open an account, such as Wealthfront Cash, which spreads your deposits for you.
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AtCNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products.While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
