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FDIC Insurance Basics
The FDIC insures deposits in most banks and savings associations located in the United States. The FDIC protects depositors against the loss of their deposits if an FDIC-insured bank or savings association fails. FDIC insurance is backed by the full faith and credit of the United States government.
For simplicity, the term "insured bank" is used to mean any bank or savings association that has FDIC insurance. To check whether a bank or savings association is insured by the FDIC, call toll-free at:
1-877-275-3342
use "Bank Find" at:
www.fdic.gov/deposit
or look for the official FDIC sign where deposits are received. Beginning in 2007, insured banks will display this new official FDIC sign:
What does FDIC deposit insurance cover?
FDIC insurance covers all types of deposits received at an insured bank, including deposits in checking, NOW, and savings accounts, money market deposit accounts, and time deposits such as certificates of deposit (CDs).
FDIC deposit insurance covers the balance of each depositor's account, dollar-for-dollar, up to the insurance limit, including principal and any accrued interest through the date of the insured bank's closing.
The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, or municipal securities, even if these investments were bought from an insured bank.
The FDIC does not insure U.S. Treasury bills, bonds, or notes. These are backed by the full faith and credit of the United States government.
How much insurance coverage does the FDIC provide?
The basic insurance amount is $100,000 per depositor, per insured bank.
The $100,000 amount applies to all depositors of an insured bank except for owners of certain retirement accounts, which are insured up to $250,000 per owner, per insured bank.
Deposits in separate branches of an insured bank are not separately insured. Deposits in one insured bank are insured separately from deposits in another insured bank.
Deposits maintained in different categories of legal ownership at the same bank can be separately insured. Therefore, it is possible to have deposits of more than $100,000 at one insured bank and still be fully insured.
The following sections describe the eight ownership categories recognized by FDIC regulations and the requirements that must be met to have coverage beyond the basic $100,000 insurance amount.
Single Accounts
A single account is a deposit owned by one person. The following deposit account types are included in this ownership category:
- Accounts held in one person's name alone
- Accounts established for one person by an agent, nominee, guardian, custodian, or conservator, including Uniform Transfers to Minors Act accounts, escrow accounts, and brokered deposit accounts
- Accounts held in the name of a business that is a sole proprietorship (for example, a "DBA account")
- Accounts established for a decedent's estate, and
- Any account that fails to qualify for coverage under another ownership category.
All single accounts owned by the same person at the same insured bank are added together and the total is insured up to $100,000.
If an individual has a deposit account titled in his or her name alone but gives another person the right to withdraw deposits from the account, the account will be insured as a single account only if the insured bank's deposit account records indicate that:
- the other signer is authorized to make withdrawals pursuant to a Power of Attorney, or
- the account is owned by one person and the other person is authorized to withdraw deposits on the owner's behalf (for example, a convenience account)
If the insured bank's account records do not indicate that such a relationship exists, the deposit would be insured as a joint account.
| Account Title |
Deposit Type |
Account Balance |
| Marci Jones |
NOW |
$ 5,000 |
| Marci Jones |
Savings |
20,000 |
| Marci Jones |
CD |
100,000 |
| Marci’s Memories (a sole proprietorship) |
Checking |
25,000 |
| Total Deposits |
|
150,000 |
| Amount Insured |
|
100,000 |
| Amount Uninsured |
|
$ 50,000 |
Explanation:
Marci Jones has four single accounts at the same insured bank: three accounts held in her name alone and one account held by her business, which is a sole proprietorship. Deposits owned by a sole proprietorship are insured as the single ownership deposits of the person who owns the business. Thus, the deposits in all of these accounts are added together and the total balance, $150,000, is insured for $100,000, leaving $50,000 uninsured.
Certain Retirement Accounts
These are deposits owned by one person and titled in the name of that person's retirement account.
The following types of retirement plan deposits qualify for coverage as "certain retirement accounts":
- All types of IRAs, including:
- Traditional IRAs
- Roth IRAs
- Simplified Employee Pension (SEP) IRAs
- Savings Incentive Match Plans for Employees (SIMPLE) IRAs
- All Section 457 deferred compensation plan accounts, such as eligible deferred compensation plans provided by state and local governments regardless of whether they are self-directed
- Self-directed defined contribution plan accounts, such as self-directed 401(k) plans, self-directed SIMPLE held in the form of 401(k) plans, self-directed defined contribution money purchase plans, and self-directed defined contribution profit-sharing plans
- Self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals
All retirement accounts listed above owned by the same person in the same FDIC-insured bank are added together and the total is insured up to $250,000.
The FDIC defines the term "self-directed" to mean that plan participants have the right to direct how the money is invested, including the ability to direct that the deposits be placed at an FDIC-insured bank.
If a participant of a retirement plan has the right to choose a particular depository institution's deposit accounts as an investment, the FDIC would consider the account to be self-directed. Also, if a plan has as its default investment option deposit accounts at a particular FDIC-insured institution, the FDIC would deem the plan to be self-directed for deposit insurance purposes because, by inaction, the participant has directed the placement of such deposits.
However, if a plan's only investment vehicle is the deposit accounts of a particular bank, so that participants have no choice of investments, the plan would not be deemed self-directed for deposit insurance purposes. Finally, if a plan consists only of a single employer/employee, and the employer establishes the plan with a single-investment option of plan assets, the plan would be considered self-directed for deposit insurance purposes.
Naming beneficiaries on a retirement account does not increase deposit insurance coverage.
Coverdell Education Savings Accounts (formerly known as an Education IRAs), Health Savings Accounts, and Medical Savings Accounts are not included in this ownership category and are not eligible for the increased coverage limit. Also, accounts established under section 403(b) of the Internal Revenue Code (annuity contracts for certain employees of public schools, tax-exempt organizations and ministers) are not eligible for the $250,000 coverage limit. For information on these types of accounts, contact the FDIC using the resources provided on the back of this brochure.
Defined-benefit plans (benefits predetermined by an employee's compensation, years of service, and age) are not eligible for the $250,000 coverage limit. For information on these types of accounts, refer to the section on Employee Benefits Plan accounts.
| Retirement Account Example |
| Account Title |
Account
Balance |
| Bob Johnson’s Roth IRA |
$ 110,000 |
| Bob Johnson’s IRA |
75,000 |
| Total |
185,000 |
| Amount Insured |
$ 185,000 |
Explanation:
Since Bob's total deposits in all retirement accounts at the same insured bank are less than the $250,000 limit, both retirement accounts are fully insured.
Joint Accounts
A joint account is a deposit owned by two or more people. To qualify for insurance under this ownership category, all of the following requirements must be met:
- All co-owners must be people. Legal entities such as corporations, trusts, estates, or partnerships are not eligible for joint account coverage.
- All co-owners must have equal rights to withdraw deposits from the account. For example, if one co-owner can withdraw deposits on his or her signature alone but the other co-owner can withdraw deposits only with the signature of both co-owners, the co-owners do not have equal withdrawal rights.
- All co-owners must sign the deposit account signature card unless the account is a CD or is established by an agent, nominee, guardian, custodian, executor or conservator.
If all of these requirements are met, each co-owner's share of every account that is jointly held at the same insured bank is added together with the co-owner's other shares, and the total is insured up to $100,000.
The FDIC assumes that all co-owners' shares are equal unless the deposit account records state otherwise.
For example, a husband and wife could have up to $200,000 in one or more joint accounts at the same insured bank and the deposits would be fully insured. The husband's ownership share is insured up to $100,000 and the wife's ownership share is insured up to $100,000.
Insurance coverage of joint accounts is not increased by rearranging the owners' names or by changing the styling of their names. Alternating the use of "or," "and" or "and/or" to separate the names of co-owners in a joint account title also does not affect the amount of insurance coverage provided.
In addition, using different Social Security numbers on multiple accounts held by the same co-owners will not increase insurance coverage.
| Account Title |
Deposit Type |
Account
Balance |
| Mary and John Smith |
NOW |
$ 25,000 |
| John or Mary Smith |
Savings |
100,000 |
| Mary or John or Robert Smith |
CDs |
150,000 |
| Total Deposits |
|
$ 275,000 |
| Insurance coverage for each owner is calculated as follows: |
| Depositors |
Ownership
Share |
Amount
Insured |
Amount
Uninsured |
| Mary |
$ 112,500 |
$ 100,000 |
$ 12,500 |
| John |
112,500 |
100,000 |
12,500 |
| Robert |
50,000 |
50,000 |
0 |
| Total |
$ 275,000 |
$ 250,000 |
$ 25,000 |
Explanation:
- Mary's ownership share in all joint accounts equals 1/2 of the NOW account ($12,500), 1/2 of the savings account ($50,000), and 1/3 of the CD ($50,000), for a total of $112,500. Since her coverage in the joint ownership category is limited to $100,000, $12,500 is uninsured.
- John's ownership share in all joint accounts is the same as Mary's, so $12,500 is uninsured.
- Robert's ownership share in all joint accounts is 1/3 of the CD, or $50,000, so his share is fully insured.
Employee Benefit Plan Accounts
Employee benefit plan accounts are deposits of a pension plan, profit-sharing plan or other employee benefit plan.
Employee benefit plan deposits are insured up to $100,000 for each participant's non-contingent interest in the plan.
This coverage is known as "pass-through" insurance because the insurance coverage passes through the plan administrator to each participant's interest or share.
Coverage for a plan's deposits is not based on the number of participants, but rather on each participant's share of the plan. Because plan participants normally have different interests in the plan, insurance coverage cannot be determined by simply multiplying the number of participants by $100,000.
To determine the maximum amount a plan can have on deposit in a single bank and remain fully insured, first determine which participant has the largest share of the plan assets, then divide $100,000 by that percentage. For example, if a plan has 20 participants, but one participant has an 80% share of the plan assets, the most that can be on deposit and remain fully insured is $125,000. ($100,000/.80 = $125,000)
| Example - Employee benefit plan that qualifies for "pass-through" coverage |
| Account Title |
Balance |
| Happy Pet Clinic Benefit Plan |
$ 285,000 |
| Plan Participants |
Plan Share |
Share of Deposit |
Amount Insured |
Amount Uninsured |
| Dr. Todd |
35% |
$ 99,750 |
$ 99,750 |
$ 0 |
| Dr. Jones |
30% |
85,500 |
85,500 |
0 |
| Tech Evans |
20% |
57,000 |
57,000 |
0 |
| Tech Barnes |
15% |
42,750 |
42,750 |
0 |
| Plan Total |
100% |
$ 285,000 |
$ 285,000 |
$ 0 |
Explanation:
This employee benefit plan can deposit $285,000 in a single insured bank and have all of its participants fully insured. The $285,000 deposit results in Dr. Todd (the largest participant) being insured for $99,750 (35% of $285,000). When Dr. Todd is fully insured, the rest of the participants will be insured, since they have smaller shares of the plan.
Plan participants who want to know more about how a plan's deposits are insured should consult with the plan administrator.
Below are additional account types and FDIC information for each using the links below:
Revocable Trust Accounts
Irrevocable Trust Accounts
Corporation/Partnership/Unincorporated Association Accounts
Government Accounts
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