What Is The Limit For FDIC Insurance In 2023? - District Capital (2023)

What Is The Limit For FDIC Insurance In 2023? - District Capital (1)

  • Money 101
  • Alvin Carlos
  • June 23, 2022

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Are your hard-earned bank deposits insured? Luckily for the majority of Americans, they are. The Federal Deposit Insurance Corporation (FDIC) is an independent government agency that is in charge of banking and consumer safety. The FDIC insures your bank deposits, up to a limit, in the event of a bank failure. In this blog, we are going to look at what FDIC insurance is, the limit for FDIC insurance, and how you can maximize your coverage.

Table of Contents

What is FDIC insurance and how does it work?

FDIC insurance safeguards your money at any FDIC-insured bank in case that bank fails. The insurance covers up to $250,000 per depositor, per FDIC-insured bank, per ownership category. If you opened a savings account with $125,000 and then you made $25,000 in interest then you would be insured for $150,000. If you have more than $250,000 in deposits across several accounts in a single bank, then you are only insured for $250,000.

When was FDIC insurance created?

The FDIC was established by the Banking Act of 1933 during the Franklin D. Roosevelt administration. Before FDIC insurance was created, thousands of banks collapsed and many account holders lost a lot of money. While another bank failure is unlikely, it could still happen and you will want to know that your money is protected.

What does FDIC insurance actually cover?

The FDIC insures up to $250,000 per depositor, per institution, and per ownership category.

FDIC insurance only covers deposits at certain banks, including:

  • Checking accounts
  • Savings accounts
  • Certificates of deposit (CDs)
  • Money market deposit accounts
  • Cashier’s checks
  • The FDIC also insures bank deposits in some retirement accounts like IRAs and 401(k)s. (It does not insure investments.)

What Is The Limit For FDIC Insurance In 2023? - District Capital (2)


What isn’t covered by FDIC insurance?

FDIC insurance does not cover:

  • Contents of safety deposit boxes
  • Investments in stocks, bonds, or mutual funds
  • Losses from investments
  • Life insurance policies
  • Annuities
  • Payment providers such as Paypal and Venmo

    If any of these apply to you, please talk to your financial advisor to ensure that they are protected.


Do I need to apply for FDIC insurance?

You don’t need to apply for FDIC insurance. When you open an account at a bank, you may notice the account is FDIC-insured. As long as you open an account with an FDIC-insured bank then you will be covered for up to $250,000.

Different FDIC ownership categories and the insurance limits

FDIC Ownership CategoriesInsurance Limits
Single accounts (owned by one person)$250,000 per owner
Joint accounts (owned by more than one person)$500,000 total ($250,000 per co-owner)
Bank deposits in certain retirement accounts, including IRAs$250,000 per owner.
Revocable trust accounts$250,000 per depositor per unique beneficiary.
Irrevocable trust accounts$250,000 per unique beneficiary entitled to the account.
Corporation, partnership and unincorporated association accounts$250,000 per corporation, partnership or unincorporated association.
Employee benefit plan accounts$250,000 per plan participant entitled to the account.
Government accounts$250,000 per official custodian

What is the limit for FDIC insurance in 2023?

There is a $250,0000 FDIC insurance limit per depositor, per institution and per ownership category.Here are some examples of FDIC insurance coverage. It is important to think about your individual scenario to make sure that you are covered.

  1. You’re single, do your banking at two banks, and you have:
  • $200,000 in a savings account at Bank 1.
  • $50,000 in a checking account at Bank 1.
  • $150,000 in certificates of deposit at Bank 2.

That is a total of $400,000 deposited at two banks. Therefore your money is protected because you have $250,000 at bank 1 and $150,000 at bank 2.

  1. You’re single, do your banking in one place, and you have:
  • $200,000 in a savings account.
  • $125,000 in a checking account.
  • $100,000 in certificates of deposit.

That is a total of $425,000 deposited in one bank. FDIC insurance will only cover up to $250,000, therefore you would lose $175,000 if something happened to the bank. If this is your current situation, then we recommend that put at least $175,000 with another bank so that your money is protected.

  1. You’re married, you both do your banking at the same place and together you have:
  • $500,000 in a joint savings account shared with your spouse.
  • $250,000 in a certificate of deposit in just your name.

That’s a total of $750,000 deposited at one bank. All of this money is protected. You are both protected for $250,000 each for the joint account. The $250,000 in the certificate of deposit is also covered because it’s in just your name which is a different ownership category.

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How can I maximize my FDIC insurance?

If you have more than $250,000, the most simple option is to have the money in multiple bank accounts at multiple banks.

You can also technically qualify for more than $250,000 in coverage if you have accounts in more than one ownership category. For example, a joint account is insured for up to $500,000 ($250,000 per co-owner). Then if each of those co-owners opens an individual checking account separately, those accounts would also have their own $250,000 coverage on top of the joint $500,000 coverage.

Another option is to set up a revocable trust. You can then name one or more beneficiaries to increase your coverage. Each beneficiary then receives $250,000 of coverage. For example, a revocable trust account with one owner and three unique beneficiaries can be insured up to $750,000. This is a slightly complicated process so it’s important to talk to your financial advisor to make sure that it has been set up correctly.

Common FDIC insurance questions

What does being FDIC insured mean?

It means that your money is held in a bank protected by the federal government. FDIC insurance only kicks in if the bank fails.

What does FDIC insured up to $250,000 mean?

It means that if your bank fails, then the FDIC will cover you for up to $250,000. If you have more than $250,000 in your individual account then that additional money will not be covered.

Are joint accounts FDIC insured to $500,000?

Yes, a joint account is insured for up to $500,000 ($250,000 per co-owner).

Is FDIC insurance unlimited?

FDIC insurance is not unlimited. There is a $250,0000 limit per depositor, per institution and per ownership category. This means that if you have over $250,000, the easiest solution to ensure that all of your money is insured is to have your money spread across various banks.

How do I know if my bank is protected by FDIC insurance?

A quick way to find out if your deposits are insured is to search for your bank on the FDIC’s BankFind tool. It is rare for banks to not have FDIC insurance but it’s important to check to make sure that you are covered.

How does the FDIC pay me back if my bank fails?

There is nothing that a depositor needs to do. When a bank fails, the FDIC gives depositors an account at another insured bank. The amount in the account would be equal to what they had in the failed bank, up to the insurance limits. If this isn’t possible, then the FDIC will issue the depositor a check. This usually happens within the next business day.

Make sure your money is protected with FDIC insurance

Over the past 80 years, the FDIC has protected people’s money and provided financial peace of mind. FDIC insurance is essentially a free way to protect your money. Check your bank account/s to make sure that you are protected and aren’t exceeding the limits for FDIC insurance. If you want help with your finances and are interested in having a comprehensive financial plan for your family, feel free to schedule a discovery call with one of our financial advisors today!

What Is The Limit For FDIC Insurance In 2023? - District Capital (5)

Alvin Carlos

Alvin Carlos, CFP®, CFA is an investment advisor and fee-only financial planner, in Washington, D.C that works with clients across the country. He has a Master’s degree in International Relations from SAIS-Johns Hopkins. Alvin is a partner of District Capital, a financial planning firm designed to help professionals in their 30s and 40s achieve their financial goals through smart investing, reducing taxes, retirement planning, and maximizing their money. Schedule a free discovery call to learn how we can help elevate your finances.

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District Capital is an independent, fee-only financial planning firm. We help professionals and entrepreneurs in their 30s and 40s elevate their finances and maximize their money. We are based in Washington, D.C and we work with people virtually nationwide.

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FAQs

What if you have more than 250000 FDIC? ›

Any individual or entity that has more than $250,000 in deposits at an FDIC-insured bank should see to it that all monies are federally insured.

What is the max that the FDIC will insure? ›

The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. And you don't have to purchase deposit insurance. If you open a deposit account in an FDIC-insured bank, you are automatically covered.

Is a joint account FDIC-insured up to $500 000? ›

Each co-owner of a joint account is insured up to $250,000 for the combined amount of his or her interests in all joint accounts at the same IDI. In determining a co-owner's interest in a joint account, the FDIC assumes each co-owner is an equal owner unless the IDI records clearly indicate otherwise.

Can I have more than $250000 of deposit insurance coverage at one FDIC-insured bank? ›

Q: Can I have more than $250,000 of deposit insurance coverage at one FDIC-insured bank? A: Yes. The FDIC insures deposits according to the ownership category in which the funds are insured and how the accounts are titled.

What to do if you have more than $250000 in bank? ›

Here are eight solutions for insuring all your money.
  1. Open an account at a different bank. ...
  2. Add a joint owner. ...
  3. Get an account that's in a different ownership category. ...
  4. Join a credit union. ...
  5. Use IntraFi Network Deposits (formerly CDARS and ICS) ...
  6. Open a cash management account. ...
  7. Put your money in a MaxSafe account.
Mar 1, 2022

How do I maximize my FDIC insurance limits? ›

If your balance is higher than your current FDIC insurance coverage amount, consider these strategies to maximize your coverage:
  1. Open a single account for each adult family member. ...
  2. Pool your money into joint accounts. ...
  3. Save for your child. ...
  4. Save for retirement with an IRA Online Savings Account or IRA CD.

Are trust accounts FDIC Insured to 500000? ›

FDIC does not consider nondeposit assets in calculating deposit insurance coverage. In general, the owner of a revocable trust account is insured up to $250,000 per each primary beneficiary.

How many bank accounts can you have FDIC insured? ›

You and your spouse each can open individual accounts at a single bank, resulting in each of you having up to $250,000 FDIC-insured. You can then also open a joint account and each has $250,000 insured in that account. Between those three accounts, you could have up to $1 million FDIC-insured at one bank.

Does the FDIC insure savings accounts for 100000? ›

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank.

Can I have multiple accounts at the same bank with FDIC insured? ›

The FDIC adds together all single accounts owned by the same person at the same bank and insures the total up to $250,000.

Does adding beneficiaries on a bank account add to FDIC limits? ›

While some self-directed retirement accounts, like IRAs, permit the owner to name one or more beneficiaries, the existence of beneficiaries does not increase the available insurance coverage.

What is a Max Safe account? ›

What is the MaxSafe Money Market? It's a Money Market account with the typical limitation of six transactions per month with FDIC insurance of up to $3.75 million per titled account. The minimum deposit to open is $1,000. There is no minimum monthly balance requirement and no monthly service fee.

What happens to an insured deposit in excess of 500000? ›

If the deposit account in a closed bank is more than P500,000.00, what happens to the excess of the maximum amount of insured deposit? The claim for the uninsured portion of the deposit is a claim against the assets of the closed bank.

Does adding a pod increase FDIC insurance? ›

Key Takeaways. Making a "payable on death" designation can increase your FDIC-insured coverage limit to $1.25 million; this is up from the standard $250,000.

How much money should you keep in the bank? ›

Most financial experts end up suggesting you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.

Is it good to have all your money in one bank? ›

Keeping all of your money at one bank can be convenient and is generally safe. However, if your account balances exceed the deposit limit that's insured by the FDIC, some of your money may not be protected if the bank fails. And if you're a fraud victim, having cash all in one place could compromise more of your money.

How much is too much in your bank account? ›

savings account

How much is too much cash in savings? An amount exceeding $250,000 could be considered too much cash to have in a savings account. That's because $250,000 is the limit for standard deposit insurance coverage per depositor, per FDIC-insured bank, per ownership category.

What is the max amount of money I can take out of my bank account? ›

Most often, ATM cash withdrawal limits range from $300 to $1,000 per day. Again, this is determined by the bank or credit union—there is no standard daily ATM withdrawal limit. Your personal bank ATM withdrawal limit also may depend on the types of accounts you have and your banking history.

What bank can insure millions? ›

If you're wondering what banks do millionaires use to insure their millions, there are currently no banks that insure millions in the US — the Federal Deposit Insurance Corporation is willing to protect up to $250,000 only per depositor, which is why millionaires need to have multiple bank accounts.

Can you keep millions in the bank? ›

In short, there is no limit on the amount of money that you can put in a savings account. No law limits how much you can save and there's no rule stating that a bank cannot take a deposit if you have a certain amount in your account already.

Is Capitalone a good bank? ›

Reputation for high customer satisfaction: Notably, Capital One was the No. 1 bank in the 2021 J.D. Power National Banking Satisfaction Study for the second consecutive year.

What accounts are not covered by FDIC? ›

What Products Are Not Insured?
  • Stock investments.
  • Bond investments.
  • Mutual funds.
  • Crypto Assets.
  • Life insurance policies.
  • Annuities.
  • Municipal securities.
  • Safe deposit boxes or their contents.
Sep 14, 2022

What are the disadvantages of a living trust? ›

No Asset Protection – A revocable living trust does not protect assets from the reach of creditors. Administrative Work is Needed – It takes time and effort to re-title all your assets from individual ownership over to a trust. All assets that are not formally transferred to the trust will have to go through probate.

What are the disadvantages of a revocable living trust? ›

Some of the Cons of a Revocable Trust

Shifting assets into a revocable trust won't save income or estate taxes. No asset protection. Although assets held in an irrevocable trust are generally beyond the reach of creditors, that's not true with a revocable trust.

How to insure more than 250k? ›

Here are four ways you may be able to insure more than $250,000 in deposits:
  1. Open accounts at more than one institution. This strategy works as long as the two institutions are distinct. ...
  2. Open accounts in different ownership categories. ...
  3. Use a network. ...
  4. Open a brokerage deposit account.
Jul 21, 2020

How much money is safe in bank? ›

Each depositor in a bank is insured upto a maximum of ₹ 5,00,000 (Rupees Five Lakhs) for both principal and interest amount held by him in the same right and same capacity as on the date of liquidation/cancellation of bank's licence or the date on which the scheme of amalgamation/merger/reconstruction comes into force.

Does FDIC cover if a bank is hacked? ›

FDIC deposit insurance does not protect accounts from a fraud or theft online (or otherwise). However, other laws and industry practices may provide coverage from cyber theft.”

How do millionaires keep their money FDIC-insured? ›

Millionaires don't worry about FDIC insurance. Their money is held in their name and not the name of the custodial private bank. Other millionaires have safe deposit boxes full of cash denominated in many different currencies.

Will CD rates go up in 2024? ›

With the Federal Reserve predicting a 40% chance of a recession within the next 12 months, there's a good chance that CD rates will top out in 2023 and moderate in late 2023 and 2024.

What guarantees a bank deposit up to 100000? ›

The FDIC manages two deposit insurance funds, the Bank Insurance Fund (BIF) and the Savings Association Insurance Fund (SAIF). The BIF insures deposits in commercial banks and savings banks up to a maximum of $100,000 per account.

What is the maximum amount you can have in a bank account? ›

Minimum balances aside, how much money can you have in a checking account? There is no maximum limit, but your checking account balance is only FDIC insured up to $250,000. However, as we'll cover shortly, it makes sense to put extra cash somewhere it will earn interest.

Should you have multiple bank accounts for FDIC? ›

FDIC insurance covers up to $250,000 per depositor for each ownership category in each distinct bank. You can open accounts at different banks or in different ownership categories at one bank to maximize your insurance coverage.

What happens when you deposit more than $10000 in the bank? ›

Banks must report cash deposits totaling $10,000 or more

But the deposit will be reported if you're depositing a large chunk of cash totaling over $10,000. When banks receive cash deposits of more than $10,000, they're required to report it by electronically filing a Currency Transaction Report (CTR).

What happens when you deposit large amounts of money in your bank? ›

Does a Bank Report Large Cash Deposits? Depositing a big amount of cash that is $10,000 or more means your bank or credit union will report it to the federal government. The $10,000 threshold was created as part of the Bank Secrecy Act, passed by Congress in 1970, and adjusted with the Patriot Act in 2002.

How much of a depositor's money is insured if a bank fails? ›

What is the FDIC insurance amount? The standard insurance amount is $250,000 per depositor, per insured bank, for each ownership category. This includes principal and accrued interest and applies to all depositors of an insured bank.

Where can I put my money in 2023? ›

Overview: Best low-risk investments in 2023
  • High-yield savings accounts. ...
  • Series I savings bonds. ...
  • Short-term certificates of deposit. ...
  • Money market funds. ...
  • Treasury bills, notes, bonds and TIPS. ...
  • Corporate bonds. ...
  • Dividend-paying stocks. ...
  • Preferred stocks.
Jan 1, 2023

Can you put millions in a checking account? ›

How much money can you put in a checking account? Generally, there's no checking account maximum amount you can have. There is, however, a limit on how much of your checking account balance is covered by the FDIC (typically $250,000 per depositor, per account ownership type, per financial institution).

Can I keep more than 250 000 in one bank? ›

The standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. The FDIC insures deposits that a person holds in one insured bank separately from any deposits that the person owns in another separately chartered insured bank.

Does adding a beneficiary increase FDIC coverage? ›

While some self-directed retirement accounts, like IRAs, permit the owner to name one or more beneficiaries, the existence of beneficiaries does not increase the available insurance coverage.

Does having multiple bank accounts hurt your credit? ›

Having multiple accounts — at the same bank or different banks — can be useful for managing different savings goals, and there's little harm in doing so, since it doesn't impact your credit.

What banks insure millions of dollars? ›

If you're wondering what banks do millionaires use to insure their millions, there are currently no banks that insure millions in the US — the Federal Deposit Insurance Corporation is willing to protect up to $250,000 only per depositor, which is why millionaires need to have multiple bank accounts.

What banks are not insured by FDIC? ›

The FDIC does not insure share accounts at credit unions.

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