FDIC Insurance for CDs and Savings Accounts at One Bank

Are CDs and Savings Accounts Both FDIC Insured?

Yes. Under FDIC insurance, CDs, savings accounts and other deposits at an FDIC-insured bank are covered. The catch is that they share one limit instead of getting one each.

A CD, or certificate of deposit, holds your money for a set time at a set rate. A savings account lets you take money out when you need it. To the FDIC, both are simply deposits. Coverage is automatic.

The standard insurance amount is $250,000 per depositor, per bank, per ownership category (FDIC). Ownership category means how the account is titled, such as your name alone.

Suppose you hold a $200,000 CD and $100,000 in savings, both in your name alone at one bank. Together that's $300,000. About $50,000 sits above the standard limit.

How Much FDIC Insurance Coverage Do I Get Per Depositor?

You get $250,000 per depositor, per FDIC-insured bank, per ownership category, according to the FDIC. The limit applies to each ownership category, not each account. So five accounts in your name alone at one bank share one $250,000 limit. A joint account is one that two or more people own together. A qualifying joint account at that bank is counted in its own group.

The limit counts per person. Suppose you and your sister each keep $200,000 in savings at one bank. Each account is in its owner's name alone. Each of you is a separate depositor, so both balances are fully covered. Neither one goes over $250,000.

Next, check how each of your accounts is titled. Your statements show the owner names and any beneficiary listed. Those details decide which category each account falls in.

FDIC Insurance: CDs, Savings Accounts and One Shared Limit

They share one limit. Count every account with the same owner, bank and ownership category as one group. Then compare that group's total with the $250,000 limit set by the FDIC. A money market account is a type of bank deposit account that works much like savings. Checking, savings, money market accounts and CDs all go into the same group.

Here is a made-up example we'll follow through the article. Dana puts $200,000 in a CD and $80,000 in savings, both in her name alone at one bank. Each balance looks safe on its own. Together they total $280,000, so $30,000 would be uninsured if the bank failed. The sections below show the ways she could fix it.

Different brand names that belong to one insured bank also share one limit. Check the legal bank name in your account terms.

Does FDIC Insurance Cover the Interest I Earn on a CD?

Yes, FDIC insurance covers the interest you earn on a CD, up to the limit. Interest your bank has added becomes part of your balance. So it counts toward the same $250,000 cap as your deposit. A CD that starts under the cap can grow past it.

Suppose you put $245,000 in a CD at an assumed 4% a year. Are you still fully covered after one year? Interest adds $245,000 × 0.04 = $9,800. Your balance becomes $254,800, so $4,800 sits above the cap.

Here is our own rule of thumb, worked out with assumed numbers. It is not an FDIC formula. Work backward from the limit. Divide $250,000 by 1 plus the total interest you expect.

For a 2-year CD at an assumed 4% simple interest, that is $250,000 ÷ 1.08, or about $231,481. Deposit no more than that. Compounding means earning interest on interest the bank has already added. It adds a little extra, so round down.

To plan this with your own numbers, try the FDIC insurance calculator. To confirm how interest counts on your own CD, call the FDIC at 1-877-275-3342.

Does Having Multiple Savings Accounts at One Bank Increase FDIC Coverage?

No. Having multiple savings accounts at one bank does not increase your FDIC coverage when all are in the same ownership category. A new account in the same name just splits one $250,000 limit into smaller pieces. Nicknames like "vacation fund" or "taxes" on each account do not change that.

Suppose you hold three $100,000 savings accounts in your name alone at one bank. They add up to $300,000, but only $250,000 is insured. The other $50,000 is not. A CD in your name at that bank joins the same total.

Coverage changes only with a different ownership category or a different bank. The next section explains categories.

When a Different Registration Does Add Coverage

Yes. An account in a different ownership category can be insured separately, even at the same bank. Each category gets its own $250,000 limit (FDIC). The account must meet that category's rules, though. The title alone is not enough.

A joint account qualifies only when each co-owner is a person, not a business. Each co-owner also needs an equal right to withdraw. Then each co-owner's share of all joint accounts at that bank is insured up to $250,000. That is apart from their single accounts.

Back to Dana. Suppose she and her partner share a qualifying $300,000 joint account, split evenly. Her $150,000 share is insured apart from her $280,000 in single accounts. If she moved $40,000 from savings into the joint account, her single total would drop to $240,000. Her joint share would rise to $170,000, still under the limit. But her partner would then have an equal right to that money.

Beneficiary accounts follow their own rules. A payable-on-death account is one example. It passes to the people you name when you die. The owner must name each beneficiary in the bank's records. Coverage can grow with each eligible beneficiary. This article can't tell you the exact amount for your account.

Who counts as eligible, and which cap applies, depends on how the FDIC reads your exact account. A trust account is one set up under a trust, a legal plan that holds money for other people. So treat any beneficiary or trust account as needing an FDIC check before you rely on it.

If deposits over $250,000 are linked to trust documents, the FDIC may need extra time to set coverage (FDIC). Retirement accounts have separate rules too. For any of these, call 1-877-275-3342 to check your own numbers.

Are CDs Bought Through a Brokerage Covered by the FDIC?

Yes, brokered CDs can be FDIC insured. The CD must come from an FDIC-insured bank. For deposits set up by a broker, the FDIC may need extra time to work out coverage. It may also ask you for more information (FDIC). Keep the brokerage statements that show you own the CD.

A brokered CD is a bank CD you buy through an investment account. The issuing bank is the one that counts. The standard limit is $250,000 per depositor, per insured bank, per ownership category, according to the FDIC.

Suppose, as an assumed example, you own a $150,000 brokered CD and keep $120,000 in savings at that same bank. Together they make $270,000. If both sit in one ownership category, $20,000 is uninsured.

To insure more than $250,000 in brokered CDs, buy them from different issuing banks. SIPC, the Securities Investor Protection Corporation, protects customers when a brokerage firm fails. It is a separate program for investment accounts, not for banks. Don't count on SIPC to fill the gap. It does not cover a failed bank.

How Can I Insure More Than $250,000 in CDs?

Spread the money across more than one insured bank. Another option is an ownership category that truly fits you. The FDIC insures $250,000 per depositor, per insured bank, per ownership category.

For example, suppose you have $400,000. Two $200,000 CDs at two different banks start out fully covered. Each one has $50,000 of room for interest. Before you buy, project each CD's balance through its full term, including the interest the bank will add. Brokered CDs from different issuing banks work the same way.

Joint or beneficiary accounts can raise coverage at one bank, but only within firm limits. A joint account counts only if every co-owner is a person with an equal right to withdraw. Then each co-owner's share of all joint accounts at that bank is insured up to $250,000.

Beneficiary and trust accounts are harder to count. Don't rely on your own math for them. Ask the FDIC to confirm your coverage before moving money. Do not add a person only for coverage. A co-owner gets an equal right to withdraw, so that person may gain rights to the money.

A credit union is another place to hold money, but the FDIC does not cover it. The National Credit Union Administration (NCUA) is a separate federal agency. It runs the insurance program for credit unions, much as the FDIC does for banks. Its share insurance covers federally insured credit unions only. Not every credit union has it, so check yours before you deposit. The next section explains how that changes your count.

In our opinion, splitting across banks beats chasing a slightly higher rate at one bank. The cost is more accounts to track. Moving an existing CD has a cost too. You may need to wait until it matures, or pay an early-withdrawal penalty to take the money out sooner. Compare that penalty with the amount at risk before you move it.

Treasury bills are short-term loans you make to the US government. Before you commit a large sum, check whether treasury bills are better than CDs after state taxes.

Are Credit Union Accounts Insured by the FDIC?

No. The FDIC does not insure credit unions. Federally insured credit unions are covered by the NCUA, which stands for the National Credit Union Administration. It is a separate federal agency.

That changes how you count your limits. The FDIC limit is $250,000 per depositor, per FDIC-insured bank, per ownership category, according to the FDIC. Money at a credit union never counts toward that bank limit.

Suppose you keep savings at a bank and more at a credit union. Each balance is checked under its own program. So a credit union is one more separate place to hold savings.

Before you deposit, look for the NCUA notice in the branch or on the credit union's website.

A Five-Minute Check of Your Own FDIC Coverage

You can check your coverage in a few minutes with your latest statements and a pen. For a qualifying joint account, count only your share. For example, your half of a $300,000 joint account is $150,000. For beneficiary or trust accounts, call the FDIC before you rely on your own math.

1. List every CD, savings, checking and money market balance. Include any interest already added.
2. Group the list by each bank's legal name, not its brand name. Then group by ownership category within each bank.
3. Flag any group over $250,000.

Not sure about a flagged group? Call 1-877-275-3342 or contact the FDIC Information and Support Center (FDIC).

Conclusion: One Owner, One Bank, One Category, One Limit

Your CDs and savings accounts are both insured, but they can share one limit. With FDIC insurance, CDs, savings accounts and checking at the same bank are added together when they share an owner and ownership category. The FDIC covers $250,000 per depositor, per insured bank, per ownership category (FDIC).

So count by bank and category, never by account. Think back to Dana. Her $200,000 CD and $80,000 savings looked safe one by one, but they made $280,000 in one category. In our example, she moves $40,000 to a second insured bank. That leaves $240,000 at the first bank, all covered, with $10,000 of room for interest.

Run the five-minute check today. Move anything over the limit to a second insured bank. If the extra money sits in a CD, check its maturity date first. Breaking a CD early can cost a penalty, so compare that cost with waiting until it matures. When you open a new CD, leave room below $250,000 for the interest it will earn by maturity.