How fdic bank deposit insurance works

THE LIMITS FDIC insurance covers bank checking accounts, savings accounts, money market deposit accounts and certificates of deposit as well as cashier’s checks and money orders. Deposit

insurance doesn’t cover stocks, bonds, mutual funds or other investments purchased through a bank, nor does it cover the contents of safe-deposit boxes. Investors in a bank’s stock are not

covered, either.​ ​FDIC insurance protects up to $250,000 per depositor, per deposit category, per insured bank. Let’s break that down.​ ​PER DEPOSITOR. Let’s say you have a checking account

and your spouse has a checking account at the same bank. Each account is insured to $250,000, for a total of $500,000. FDIC insurance also covers joint accounts separately; the owners of

the account don’t have to be related. Each co-owner is insured for $250,000 for his or her combined interest in all the joint accounts at the institution. A couple could each have personal

checking accounts with $250,000 and a joint account with $500,000 at the same bank and be insured for a total of $1 million.​ PER DEPOSIT CATEGORY. The FDIC insures 14 different types of

deposits. The four most common categories are single accounts, joint accounts, trust accounts and certain self-directed retirement accounts, each insured up to $250,000 for each owner at the

same bank. If you have a checking account with $250,000 and an individual retirement account worth $250,000 at the same bank, you’re insured for $500,000.​ PER BANK. You could have $250,000

each at 10 FDIC-insured banks and be covered for $2.5 million. Bear in mind that credit unions are not covered by FDIC insurance; instead, the National Credit Union Administration backs

credit union share accounts for $250,000 under similar rules. There are still a few savings and loan institutions, which are covered by FDIC insurance. The FDIC has a handy tool to tell you

if it insures your bank, as well as one that tells you how much FDIC coverage you have.