FDIC Insurance Limits

As a banking customer, it’s important to know if your deposits are protected by FDIC insurance. The Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency that provides insurance to depositors in case a bank fails. FDIC insurance protects deposits up to a certain amount per account holder, per FDIC-insured bank. In this article, we’ll explore FDIC insurance limits, how they work, and answer some frequently asked questions.

FDIC Insurance Limits: How They Work

FDIC insurance limits apply to each depositor and ownership category at each FDIC-insured bank. If a bank fails, the FDIC will step in to protect the depositor’s insured deposits up to the insurance limit. The current standard insurance limit is $250,000 per depositor, per FDIC-insured bank. This means that if you have multiple accounts at one bank, the total of all your deposits at that bank is insured up to $250,000.

It’s important to note that the $250,000 insurance limit is per depositor, not per account. If you have multiple accounts with different ownership categories, such as individual, joint, or trust accounts, each ownership category is insured separately up to $250,000. Additionally, deposits in different FDIC-insured banks are insured separately, so it’s possible to have more than $250,000 in insured deposits if you have accounts at different banks.

Types of Ownership Categories

Ownership categories determine how FDIC insurance applies to your deposits. Here are the most common ownership categories:

FDIC Insurance Limits for Different Ownership Categories

Here are the current FDIC insurance limits for different ownership categories:

It’s important to note that the FDIC insurance limit for retirement accounts is per owner, per beneficiary. This means that if you have a spouse or child listed as a beneficiary on your retirement account, their share of the account is also insured up to $250,000. Additionally, deposits in different FDIC-insured banks are insured separately, so it’s possible to have more than $250,000 in insured deposits if you have retirement accounts at different banks.

Frequently Asked Questions

What happens if I have more than $250,000 in deposits at one bank?

If you have more than $250,000 in deposits at one FDIC-insured bank, the excess amount is not insured. It’s important to spread your deposits across multiple banks or ownership categories to ensure that all your deposits are insured up to the limit.

Are all types of accounts insured by FDIC?

No, not all types of accounts are insured by FDIC. FDIC insurance covers deposit accounts, such as checking accounts, savings accounts, CDs, and money market accounts. Investments, such as stocks, bonds, mutual funds, and annuities are not covered by FDIC insurance.

What happens to my deposits if my bank fails?

If your bank fails, the FDIC will step in as the receiver and take over the bank’s operations. Your insured deposits will be transferred to another FDIC-insured bank, and you will have full access to your funds. If your deposits exceed the insurance limit, you may not recover all your funds.

Are credit unions insured by FDIC?

No, credit unions are not insured by FDIC. Credit unions are insured by the National Credit Union Administration (NCUA). The insurance limit for credit unions is also $250,000 per depositor, per ownership category. However, credit unions may have different ownership categories and insurance limits, so it’s important to check with your credit union for details.

Can I increase my FDIC insurance coverage?

Yes, you can increase your FDIC insurance coverage by opening accounts at different FDIC-insured banks, or opening accounts in different ownership categories. You can also increase your coverage by opening retirement accounts with different beneficiaries. It’s important to note that the FDIC insurance limit applies to all your deposits at one bank, so spreading your deposits across multiple banks is the best way to increase your coverage.

Conclusion

FDIC insurance is an important protection for banking customers. Understanding FDIC insurance limits and ownership categories can help you ensure that all your deposits are insured up to the limit. By spreading your deposits across multiple banks or ownership categories, you can increase your coverage and protect your funds in case of a bank failure. If you have any questions about FDIC insurance or how it applies to your accounts, contact your bank or visit the FDIC website for more information.