Deposit insurance pays insured depositors when a bank fails. The FDIC covers at least $250,000 per depositor, per ownership category, at each insured bank. No depositor has lost a penny of insured funds since 1933, per the agency. Bank assessments fund the pool behind that limit.
The headline number hides the mechanics. Coverage runs per bank, not per account. It also runs per ownership category, not per deposit. Products sold inside a bank branch sit outside the insurance. Mutual funds and crypto assets are the plain cases. That line shapes how companies split balances and how banks price the deposits that fund the loan book.
The rules also differ by institution type. Banks answer to the FDIC. Federally insured credit unions answer to the NCUA, with its own fund. The banking desk keeps both rulebooks in view, because coverage math drives treasury choices daily.
How does deposit insurance work
The FDIC keeps the Deposit Insurance Fund. Banks pay assessments into it. Interest on investments in US government obligations adds more. The fund is backed by the full faith and credit of the United States. When an insured bank closes, the FDIC acts as receiver. It moves deposits to an acquiring bank or pays depositors directly. Per the agency’s guide, checking, NOW and savings accounts all carry the cover. So do money market deposit accounts, CDs and items like cashier’s checks.
What the $250,000 limit covers
The split is binary: deposits are in, investments are out. An FDIC-insured bank can sell products that carry no insurance. Crypto assets sit in the not-covered column, and the FDIC says so on its coverage page.
- Covered: checking, NOW and savings accounts, money market deposit accounts, CDs, cashier’s checks and other official items a bank issues
- Not covered: stocks, bonds, mutual funds, annuities, life insurance policies, safe deposit box contents, US Treasury bills, municipal securities and crypto assets
Ownership categories stack the limit
The per-category math multiplies coverage at one bank. A single account draws its own $250,000. A joint account adds a separate limit. Retirement accounts such as IRAs form another bucket. A business account is measured apart from an owner’s personal deposits at the same bank. We covered a connected angle in Banking While Unbanked: How to Open a Bank Account With Thin Credit or a Rough History.
Stacking works across banks too. The same single account at two banks draws a full limit at each. The FDIC’s EDIE estimator runs the math for a given mix of accounts.
Credit unions run the parallel play
Federally insured credit unions sit under the NCUA. Its fund, the NCUSIF, dates from 1970. It insures member share accounts to at least $250,000 per member. The fund is backed by the full faith and credit of the United States, per the agency’s share insurance guide. Coverage attaches when a member joins. Share draft accounts, share savings accounts and share certificates all fall under it.
One caveat sits at the state level. Some state-chartered credit unions carry private insurance. That cover has no federal backing, a line the NCUA guide draws clearly. Rules are also in motion. Revised trust account rules take effect December 1, 2026. They merge revocable and irrevocable trust coverage into one category.
When banks actually fail
Closures cluster. The FDIC’s failed-bank list shows Silicon Valley Bank and Signature Bank in March 2023. First Republic followed on May 1, 2023. Two banks closed in 2024. Six have closed in 2026 through late October, the latest Nano Banc of Irvine, California, on September 25, 2026. Each entry names the bank that took the deposits. JPMorgan Chase Bank took First Republic’s. Sunwest Bank took Nano Banc’s. The list is the cleanest public ledger of each resolution.
Conclusion: Check the bucket, check the bank
Deposit insurance reduces to arithmetic. The floor is $250,000 per depositor, per bank, per ownership category. Categories stack. Some products fall outside the fund. The FDIC has paid every insured deposit since 1933, and the NCUSIF has matched the structure since 1970. Companies that need more headroom at one bank split balances across categories, banks or both. Then they verify the counterparty through the FDIC’s BankFind Suite. The coverage exists; the categories decide how much of it attaches. For related coverage, see Why Online Banks Pay More on Savings Than Branch Networks.
