Yes, CDs are FDIC insured up to $250,000 per depositor per bank

A Certificate of Deposit (CD) held at an FDIC-insured bank is protected by the Federal Deposit Insurance Corporation. This means if the bank fails, the FDIC will reimburse you for the money in that CD, up to the standard insurance limit of $250,000 per depositor per institution.

The protection is automatic — you do not need to register or do anything extra. If your bank is FDIC-insured (which nearly all banks are), your CD is covered from the moment you open it. The FDIC does not charge you a fee for this insurance, and it does not reduce the interest you earn.

The catch is that the $250,000 limit applies to all your deposits combined at that one bank — checking accounts, savings accounts, money market accounts, and CDs all count toward the same limit. If you have $150,000 in a CD and $120,000 in a savings account at the same bank, only $250,000 total is insured, leaving $20,000 unprotected.

Key Takeaways

  • FDIC insurance covers CDs up to $250,000 per depositor per bank, and this protection is automatic at any FDIC-insured bank.
  • The $250,000 limit includes all your deposit accounts at that bank combined, not $250,000 per account type.
  • If you have more than $250,000 to protect, you can open CDs at different banks or use different ownership categories (joint accounts, retirement accounts) to increase coverage.
  • Credit unions use a similar system called NCUA insurance, which also covers CDs up to $250,000 per member per institution.
  • Online banks and brick-and-mortar banks receive the same FDIC protection — the bank's location or size does not change your coverage.

How to verify your bank is FDIC insured

Before you open a CD, confirm that the bank itself is FDIC-insured. The FDIC maintains a searchable database called the FDIC Bank Find tool on its website (fdic.gov). You can search by bank name or location to see whether that institution is covered.

Most traditional banks and online banks are FDIC-insured. However, some financial institutions — including some online lenders, investment firms, and money services companies — are not. If a bank is not FDIC-insured, your CD is not protected if the bank fails, no matter how safe it seems.

You can also ask the bank directly. Any FDIC-insured bank will display the FDIC logo on its website or in its branches, and staff can confirm your coverage in writing if you ask.

What happens if the bank fails

If an FDIC-insured bank fails, the FDIC steps in to protect your deposits. In most cases, the FDIC arranges for another bank to take over the failed bank's accounts. Your CD transfers to the new bank, and you keep your money and the interest rate you locked in — the transition is usually seamless and you may not notice anything has changed.

If no bank takes over the account, the FDIC pays you directly. This process typically takes a few weeks. You receive a check or electronic transfer for up to $250,000 of your CD balance. Any amount above $250,000 is not covered and may be lost.

Bank failures are rare in the modern U.S. The last significant wave occurred during the 2008 financial crisis. Since then, regulatory oversight has tightened, and FDIC insurance has prevented depositors from losing money in the handful of bank failures that have occurred.

How to protect more than $250,000 in CDs

If you have more than $250,000 to invest in CDs, you can increase your FDIC coverage by spreading the money across multiple banks. Each bank gives you a separate $250,000 limit. So $250,000 at Bank A and $250,000 at Bank B are both fully covered.

You can also use different ownership categories at the same bank to increase coverage. For example, a CD in your name alone is covered up to $250,000, a CD in a joint account with your spouse is covered up to $250,000 as a separate category, and a CD in a retirement account (like an IRA) is covered up to $250,000 as yet another category. The FDIC treats these as distinct deposits.

Keep track of your total deposits at each bank. The FDIC's online calculator can help you understand how much of your money is covered under different scenarios. If you are unsure whether a specific arrangement is covered, contact the bank or the FDIC directly before you deposit the money.

Credit unions and NCUA insurance

If you open a CD at a credit union instead of a bank, your coverage comes from the National Credit Union Administration (NCUA), not the FDIC. NCUA insurance works the same way: it covers CDs up to $250,000 per member per credit union.

Like FDIC insurance, NCUA coverage is automatic and free. You can search for NCUA-insured credit unions on the NCUA's website (ncua.gov). The same rules about combining accounts and using multiple institutions to increase coverage apply to credit unions as well.

What FDIC insurance does not cover

FDIC insurance protects the money you deposit, but it does not protect you from interest rate risk or inflation. If you lock in a CD at 2% and inflation rises to 5%, the FDIC will not make up the difference. You are protected against losing your principal if the bank fails, not against the purchasing power of your money declining over time.

FDIC insurance also does not cover investment products like stocks, bonds, mutual funds, or brokered CDs held through a brokerage firm. If you buy a CD through an investment account, it may be covered under different rules or not covered at all, depending on how the brokerage structures the account. Always ask whether a CD is held directly at a bank or through a third party before you invest.

Additionally, FDIC insurance does not cover safe deposit boxes, valuables stored in those boxes, or any losses from fraud or theft. If someone steals your debit card or hacks your account, the FDIC does not reimburse you — that is a separate matter handled by the bank's fraud department and your own liability limits.

Frequently Asked Questions

Can I have more than one CD at the same bank and have both covered?

No. All your deposits at one bank — whether they are in one CD, multiple CDs, savings accounts, or checking accounts — share the same $250,000 insurance limit. If you have a $200,000 CD and a $100,000 CD at the same bank, only $250,000 total is covered, leaving $50,000 uninsured.

Is my CD covered if I open it online?

Yes, as long as the online bank is FDIC-insured. Online banks and traditional brick-and-mortar banks receive the same FDIC protection. Check the bank's FDIC status using the Bank Find tool before you open the account.

What if my CD is in a trust or estate account?

Trust and estate accounts may have different FDIC coverage limits than individual accounts. A CD held in a revocable trust, for example, is covered up to $250,000 as a separate category from your individual deposits. Speak with the bank or the FDIC about your specific situation to understand how much is covered.

Do I lose my CD if the bank is bought by another bank?

No. If one bank acquires another bank, your CD transfers to the acquiring bank and you keep your money and interest rate. This is different from a bank failure — it is a normal business transaction and your FDIC coverage continues.

What if I have a CD with a brokerage firm, not a bank?

Brokered CDs may not be FDIC-insured, or they may be covered under different rules depending on how the brokerage holds them. Before you buy a brokered CD, ask the brokerage firm in writing whether it is FDIC-insured and what the coverage limits are. Do not assume brokered CDs have the same protection as bank CDs.