Yes, CDs are insured by the FDIC up to $250,000 per depositor, per bank, per ownership category

Your money in a certificate of deposit is covered by FDIC insurance the same way a savings account is. The Federal Deposit Insurance Corporation insures deposits at member banks if the bank fails. The standard coverage limit is $250,000 per person, per bank, per account ownership type. If you have $250,000 in a CD at one bank and the bank closes, you get all of it back. If you have $300,000, the FDIC covers $250,000 and you lose the rest.

This protection applies whether your CD matures in three months or five years. The FDIC does not care how long your money is locked away. What matters is whether the bank holding it is an FDIC member and whether you stay within the coverage limits.

Not every bank is FDIC-insured. Most traditional banks are, but some online banks, credit unions, and non-bank financial institutions are not. Before you open a CD, check the bank's website or call and ask directly whether they carry FDIC insurance. The FDIC website has a tool called BankFind where you can search any bank by name to confirm membership.

Key Takeaways

  • The FDIC insures CDs up to $250,000 per person per bank, regardless of the CD's term length or interest rate.
  • Coverage applies only at FDIC member banks, so you must verify your bank's membership before opening a CD.
  • If you have multiple CDs at the same bank under the same ownership, the $250,000 limit covers all of them combined, not each one separately.
  • Joint account CDs and CDs held in trust receive separate coverage limits, so you can insure more than $250,000 at one bank by using different ownership categories.

How the $250,000 limit works across multiple CDs

The $250,000 coverage is a total per bank, not per CD. If you have a $150,000 CD and a $120,000 CD at the same bank in your name alone, the FDIC covers only $250,000 of the combined $270,000. You lose $20,000.

This is where ownership category matters. If you have a $250,000 CD in your individual name and another $250,000 CD in a joint account with your spouse at the same bank, both are fully covered. The FDIC treats them as separate accounts because the ownership is different. A CD in a revocable trust also gets its own $250,000 limit, as does a CD held for a minor under a custodial arrangement.

If you want to keep more than $250,000 in CDs and have it all insured, you can split the money across different banks. A $300,000 CD at Bank A and a $300,000 CD at Bank B are both fully covered, because the FDIC limit is per bank, not per person overall.

What happens to your CD if the bank fails

If an FDIC member bank closes, the FDIC steps in and pays you the balance of your CD up to $250,000. You do not have to do anything to claim it—the FDIC handles the payout automatically. The process usually takes a few days to a few weeks, depending on how the bank's closure is handled.

Your CD does not have to mature for you to receive your money. If your bank fails when you have a three-year CD with two years remaining, you still get paid. The FDIC does not penalize you for early withdrawal in a bank failure situation.

The interest you have earned up to the moment of failure is also covered by the $250,000 limit. If your CD balance plus accrued interest totals $260,000, the FDIC covers $250,000 of that combined amount.

CDs at online banks and credit unions

Online banks that are FDIC members offer the same insurance protection as brick-and-mortar banks. The FDIC does not distinguish between them. However, some online financial institutions are not FDIC-insured, so you must verify before you deposit money.

Credit unions are not covered by the FDIC. Instead, they are insured by the National Credit Union Administration (NCUA), which offers the same $250,000 per member per credit union limit. If you have a CD at a credit union, check whether it is NCUA-insured. Most federally chartered credit unions are, but some state-chartered ones may not be.

Risks that FDIC insurance does not cover

FDIC insurance protects you only if the bank fails. It does not protect you from other losses. If you lose money because you chose a CD with a low interest rate, or because you withdrew early and paid a penalty, the FDIC does not reimburse you. Those are your own decisions, not the bank's failure.

If you are a victim of fraud—for example, someone tricks you into sending money to a fake bank—the FDIC does not cover that either. FDIC insurance is about bank failure, not theft or scams.

Interest rate risk is also not covered. If you lock in a 4% CD and rates rise to 5%, you cannot break the CD without penalty just because you regret the rate. The FDIC does not protect you from your own timing decisions.

How to verify FDIC coverage before you open a CD

Go to the FDIC's BankFind tool at ifdic.gov. Type in the bank's name and the state where you plan to open the CD. The tool will tell you whether that specific branch is FDIC-insured and what the current coverage limits are.

You can also call the bank directly and ask whether they are an FDIC member. A legitimate bank will answer this question without hesitation. If they seem evasive or unsure, that is a red flag.

Check the bank's website for an FDIC logo or statement. Most FDIC member banks display this prominently, often near account information or in the footer. If you cannot find any mention of FDIC insurance on the website, call and ask before you deposit money.

Frequently Asked Questions

If I have $300,000 and want to open a CD, how do I make sure all of it is insured?

Split the money across two banks. Put $250,000 in a CD at Bank A and $50,000 at Bank B. Both amounts are fully covered because the FDIC limit is per bank. Alternatively, use different ownership categories at the same bank: $250,000 in an individual CD and $50,000 in a joint CD with a spouse or family member.

Does FDIC insurance cover my CD if I withdraw early and lose money to a penalty?

No. FDIC insurance covers you only if the bank fails. Early withdrawal penalties are part of the CD contract you agreed to, not a bank failure. You are responsible for understanding the penalty terms before you open the CD.

What if my CD is at a bank that gets bought by another bank?

Your CD is still insured. A bank merger or acquisition does not trigger FDIC coverage. The FDIC only pays out when a bank actually fails and closes. Your CD simply transfers to the new owner and continues as normal.

Are CDs at online banks insured the same way as CDs at regular banks?

Yes, if the online bank is FDIC-insured. The FDIC does not distinguish between online and traditional banks. However, you must verify that the specific online bank carries FDIC insurance before you open an account, because not all of them do.

If I have a CD in a trust, does it get separate FDIC coverage?

Yes. A CD held in a revocable trust receives its own $250,000 coverage limit, separate from any individual CDs you hold at the same bank. This allows you to insure more money at one bank by using different ownership structures.