FDIC Insurance
Definition
Federal Deposit Insurance Corporation insurance that protects bank deposits up to $250,000 per depositor, per bank, per ownership category if a bank fails.
FDIC insurance is the bedrock of banking security in the United States. Created in 1933 during the Great Depression after thousands of bank failures wiped out depositors' savings, the FDIC guarantees that your money is safe in a member bank up to $250,000.
The $250,000 limit applies per depositor, per bank, per ownership category. A single person can have $250,000 insured at one bank. If they have joint accounts, each co-owner's share is separately insured. Trust accounts, retirement accounts, and business accounts each have separate coverage. A person could potentially have over $1 million insured at a single bank across different account types.
FDIC insurance covers checking accounts, savings accounts, money market deposit accounts, certificates of deposit (CDs), and cashier's checks from the bank. It does NOT cover investments like stocks, bonds, mutual funds, crypto, or the contents of safe deposit boxes, even if purchased through a bank.
The FDIC has never failed to protect insured deposits. Even during the 2023 bank failures (Silicon Valley Bank, Signature Bank), insured depositors had full access to their money within days. In those cases, the FDIC even covered uninsured deposits above $250,000, though this was an exceptional measure.
For deposits above $250,000, strategies to maximize coverage include spreading deposits across multiple banks, using different account ownership categories at the same bank, and using IntraFi network deposits that automatically spread your money across multiple banks.
Where this appears in Clarity
Clarity automatically tracks and calculates these concepts across your connected accounts.
Related Terms
Frequently Asked Questions
Is my crypto protected by FDIC?
No. FDIC insurance only covers traditional bank deposits (checking, savings, CDs). Cryptocurrency is not a deposit product and is not FDIC-insured, even if held on an exchange that is a bank or has banking partnerships. This is a key distinction for managing risk across your portfolio.
What happens if my bank fails?
For insured deposits, the FDIC typically arranges for another bank to assume the deposits, and you can access your money within 1-2 business days. In rare cases where no assuming bank is found, the FDIC sends you a check for your insured balance.