Many people in their 50s, 60s and 70s hold more cash than they used to. They may have sold a house, received an inheritance, or moved money out of the stock market into savings accounts and CDs as retirement approached. With high-yield savings paying around 4%, keeping large balances at a bank has become more common.
That raises an important question: is it all insured?
The familiar limit is $250,000. But that is per owner, per bank, per ownership category. A married couple who structures accounts properly can insure far more than $500,000 at a single bank, even without spreading money across many institutions. Here is how it works.
The basic rule
The Federal Deposit Insurance Corporation (FDIC) insures deposits at member banks up to $250,000 per depositor, per insured bank, for each account ownership category.
Covered deposits include checking, savings, money market deposit accounts and CDs. Insurance does not cover stocks, bonds, mutual funds, annuities, life insurance, crypto assets, municipal securities or safe deposit box contents. Money market mutual funds sold by brokerages are investments, not deposits, and are not FDIC insured.
Credit unions have similar coverage, up to $250,000, through the National Credit Union Administration.
The ownership categories that matter most
| Ownership category | How much is insured |
| Single accounts (one owner, no beneficiaries) | $250,000 per owner |
| Joint accounts (two or more owners) | $250,000 per co-owner |
| Certain retirement accounts (IRAs and similar) | $250,000 per owner |
| Trust accounts (revocable and irrevocable, including payable-on-death accounts) | $250,000 per owner for each eligible beneficiary, up to five beneficiaries, for a maximum of $1,250,000 per owner |
Source: FDIC, “Deposits at a Glance.” The trust rules were simplified on April 1, 2024, combining revocable and irrevocable trust coverage under one calculation.
Each category is insured separately. That is the key to insuring more than $250,000.
An example: a married couple at one bank
Robert and Ellen, both 66, keep all their cash at one bank. They have two adult children and a grandchild named as beneficiaries on their living trust account.
| Account | Owners | Insured amount |
| Robert’s savings account | Robert | $250,000 |
| Ellen’s savings account | Ellen | $250,000 |
| Joint checking and CDs | Robert and Ellen | $500,000 ($250,000 each) |
| Robert’s IRA CDs | Robert | $250,000 |
| Ellen’s IRA CDs | Ellen | $250,000 |
| Revocable living trust account, 3 beneficiaries | Robert and Ellen | $1,500,000 (2 owners x 3 beneficiaries x $250,000) |
| Total insured at one bank | $3,000,000 |
If they had five eligible beneficiaries on the trust, the trust account alone could be insured up to $2,500,000, the maximum of $1,250,000 per owner.
How trust coverage works now
Since April 2024, the calculation for trust accounts is:
Number of owners x number of eligible beneficiaries (up to 5) x $250,000
A few details matter:
- Payable-on-death (POD) accounts count as trust accounts. Adding named beneficiaries to a savings account at your bank can raise its coverage, even without a formal trust.
- Beneficiaries must be people, charities or other nonprofits. Contingent beneficiaries generally do not count while a primary beneficiary is alive.
- The cap is per owner, per bank. Even with ten beneficiaries, one owner’s trust accounts at a single bank are insured up to $1,250,000.
- All trust accounts at the same bank are combined. A living trust account and a POD savings account with the same owner are added together.
Common mistakes
Assuming joint accounts double automatically. A joint account is insured for $250,000 per co-owner, but each person’s share of all joint accounts at that bank is added together. Three joint accounts with the same spouse at one bank do not triple the coverage.
Forgetting about bank mergers. When two banks merge, deposits at both are insured separately for six months after the merger. After that, they are combined. CDs from the acquired bank keep separate coverage until maturity.
Assuming everything at a brokerage is FDIC insured. Cash swept into partner banks may be FDIC insured, but only up to the limits at each bank. Securities are protected by SIPC against the brokerage failing, not against market losses.
Not updating after a death. When an account owner dies, the FDIC insures the account as if the owner were still alive for six months. After that, coverage may shrink. Review accounts promptly after a spouse’s death.
Ways to insure larger amounts
- Use more ownership categories at your main bank, as in the example above.
- Add payable-on-death beneficiaries to savings accounts and CDs.
- Spread money across banks. Each bank has its own $250,000 limits. Check that different banking brands are really separate banks, since some online brands are divisions of the same institution.
- Use a deposit placement network. Many banks offer services that spread large deposits across many partner banks while you keep one relationship and one statement.
- Consider U.S. Treasury bills. They are backed by the U.S. government rather than FDIC insurance, and the interest is exempt from state income tax.
What happens if a bank fails
Bank failures are rare, but they do happen. When an FDIC-insured bank fails, the FDIC usually does one of two things:
- Arranges for another bank to take over the deposits. Your accounts move to the new bank, and you can typically use your debit card and checks as normal.
- Pays depositors directly up to the insurance limit, usually by check or by setting up an account at another insured bank.
The FDIC aims to make insured funds available quickly, often within a few business days. No depositor has lost a penny of insured funds since the FDIC was created in 1933. Money above the insurance limit is a different story. Uninsured depositors may get some or all of it back over time as the failed bank’s assets are sold, but there is no guarantee.
Make sure your bank is actually insured
Most banks display the FDIC sign, but online-only brands and financial apps can be confusing. Some are not banks at all; they partner with a bank that holds your deposits. Use the FDIC’s BankFind tool to confirm that the institution holding your money is an insured bank, and check which bank your app or brokerage uses. If two brands you use are part of the same bank, your deposits at both count toward the same limit.
Check your coverage in minutes
The FDIC offers a free tool called EDIE, the Electronic Deposit Insurance Estimator, on its website. You enter your accounts, owners and beneficiaries, and it calculates your coverage at each bank. You can also call the FDIC with questions.
If you are in your 40s or 50s
Large cash balances often appear suddenly, for example after selling a home, receiving an inheritance or getting a pension lump sum. Before the money arrives, decide where it will go and how accounts will be titled. It is also worth checking a parent’s accounts. Many older adults have more than $250,000 at one bank in a single name without realizing it.
Frequently asked questions
Is FDIC insurance $250,000 per person or per account? It is $250,000 per depositor, per insured bank, for each ownership category. Several accounts in the same category at the same bank are added together.
How much can a married couple insure at one bank? With single, joint and IRA accounts alone, $1,500,000. With trust or payable-on-death accounts naming beneficiaries, much more, up to $1,250,000 per owner in the trust category.
Are IRAs FDIC insured? IRA deposits at a bank, such as savings and CDs, are insured up to $250,000 per owner. Stocks, bonds and funds held in an IRA are not.
Did the FDIC change the trust account rules? Yes. Since April 1, 2024, coverage for revocable and irrevocable trust accounts is calculated the same way, at $250,000 per beneficiary for up to five beneficiaries per owner.
Sources
- Federal Deposit Insurance Corporation, “Deposits at a Glance” and trust account coverage rules effective April 1, 2024
- FDIC, Electronic Deposit Insurance Estimator (EDIE)
- National Credit Union Administration, share insurance coverage
- Securities Investor Protection Corporation, what SIPC protects
Coverage depends on your exact account titles and beneficiaries. Confirm with the FDIC or your bank. This article is general information, not financial or legal advice.
