FDIC Insurance Guide - What You Need to Know

What is the FDIC?

The Federal Deposit Insurance Corporation (FDIC) is an independent U.S. government agency created in 1933 during the Great Depression. Its primary purpose is to maintain public confidence in the banking system by insuring deposits.

When you put money in an FDIC-insured bank, the federal government guarantees that money (up to limits) even if the bank goes out of business. Since the FDIC was created, no depositor has ever lost a penny of FDIC-insured funds.

💡 Key Fact

The FDIC is funded by premiums that banks pay, not by taxpayer money. It's like insurance that banks are required to have to protect you.

What's Covered (and What's Not)

✅ FDIC Insurance COVERS:

Account Type	Covered?
Checking accounts	✓ Yes
Savings accounts	✓ Yes
Money market deposit accounts	✓ Yes
Certificates of Deposit (CDs)	✓ Yes
Cashier's checks issued by bank	✓ Yes
Money orders issued by bank	✓ Yes

❌ FDIC Insurance does NOT cover:

Product Type	Covered?
Stocks, bonds, mutual funds	✗ No
Cryptocurrency	✗ No
Life insurance policies	✗ No
Annuities	✗ No
Safe deposit box contents	✗ No
U.S. Treasury securities	✗ No (backed by U.S. government separately)

⚠️ Important

Just because a bank offers investment products doesn't mean they're FDIC insured. Always check what type of account you're opening!

Coverage Limits Explained

The standard FDIC insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.

What does that mean in practice?

Per depositor: Each person is insured separately
Per insured bank: If you have accounts at different banks, each bank's coverage is separate
Per ownership category: Single accounts, joint accounts, retirement accounts, etc. are insured separately

💡 Example: Maximizing Coverage

A married couple could have up to $1,000,000 in FDIC coverage at ONE bank: $250K in husband's single account + $250K in wife's single account + $500K in their joint account (each owner gets $250K).

What Happens If Your Bank Fails?

Bank failures are rare but they do happen. Here's what you can expect:

The Process:

FDIC takes over — Usually happens on a Friday after business hours
Another bank often acquires — Your accounts transfer automatically
If no acquirer — FDIC mails you a check within a few business days
Access continues — ATM cards and checks often keep working through the transition

💡 Historical Context

During the 2008 financial crisis, 465 banks failed between 2008-2012. In every single case, insured depositors were made whole—many didn't even notice the transition because another bank took over.

How to Verify FDIC Insurance

Before opening any bank account, verify the institution is FDIC-insured:

Method 1: Look for the Sign

FDIC-insured banks must display the official FDIC sign at teller windows. Online banks display it on their website, usually in the footer.

Method 2: Use BankFind

The FDIC's official tool to look up any bank:

🔍 Verify Your Bank

Use the official FDIC BankFind tool to confirm your bank is insured

Open FDIC BankFind →

Method 3: Ask Directly

You can always ask the bank directly. They're required to tell you their FDIC status and provide their certificate number.

FDIC and Finance Apps

Many popular finance apps aren't banks themselves—they partner with FDIC-insured banks to hold your money. This is important to understand:

How App Banking Works:

Chime — Partners with Stride Bank, N.A. and The Bancorp Bank (both FDIC-insured)
Cash App — Partners with Lincoln Savings Bank and Sutton Bank (both FDIC-insured)
Varo — Actually IS an FDIC-insured bank (Varo Bank, N.A.)
SoFi — SoFi Bank is a nationally chartered, FDIC-insured bank

⚠️ Check the Fine Print

Some app features may NOT be FDIC-insured. For example, money held in a "wallet" for payments or cryptocurrency holdings are typically not covered. Always check where your money actually sits.

We've verified the FDIC status of all apps in our Top 10 rankings. Look for the FDIC badge on each review.

🏦 FDIC Insurance Guide