Yes, certificates of deposit held at FDIC-insured banks are protected up to $250,000 per depositor, per bank, per ownership category

The Federal Deposit Insurance Corporation (FDIC) insures CDs at member banks as a standard protection. This means if the bank fails, you get your money back up to the limit, even if the bank's assets cannot cover all deposits. The FDIC does not charge you for this coverage — it is built into how member banks operate.

The $250,000 limit applies to each separate ownership category at the same bank. A CD in your name alone is insured separately from a CD you hold jointly with a spouse, which is insured separately from a CD held in a trust or retirement account. This structure matters if you have multiple CDs at one institution.

Not every place that holds money is FDIC-insured. Credit unions are covered by the National Credit Union Administration (NCUA) instead, which offers the same $250,000 protection but is a different agency. Online banks, brokerage firms, and money market funds are not FDIC-insured unless they are subsidiaries of an FDIC member bank.

Key Takeaways

  • FDIC insurance covers CDs up to $250,000 per person per bank, and you pay nothing for this protection.
  • The $250,000 limit resets for each ownership type — a personal CD, a joint CD, and a retirement CD at the same bank are each insured separately.
  • Credit unions use NCUA insurance instead of FDIC, but the coverage amount and structure are the same.
  • You can verify that a bank is FDIC-insured by checking the FDIC's Bank Find tool on its website or asking the bank directly.

How the $250,000 limit works across multiple CDs

If you have two CDs at the same FDIC-insured bank, both in your name alone, the $250,000 limit covers both of them combined. If one CD holds $150,000 and the other holds $120,000, you have $270,000 total — but only $250,000 is insured. The remaining $20,000 is uninsured.

The limit does not reset just because the CDs have different maturity dates or interest rates. All CDs in the same ownership category at the same bank count toward one $250,000 pool. If you want to insure more than $250,000 in CDs, you must split the money across different banks or use different ownership structures (such as a joint account or a retirement account) at the same bank.

Some people use this structure intentionally. A married couple could each hold a personal CD of $250,000 at one bank (total $500,000 insured), plus a joint CD of $250,000 at the same bank (another $250,000 insured), for a total of $750,000 insured at one institution. Each category is tracked separately by the FDIC.

Ownership categories that affect FDIC coverage

The FDIC recognizes several ownership types, and each one has its own $250,000 limit at the same bank:

  • Single ownership: A CD in one person's name alone.
  • Joint ownership: A CD held by two or more people with equal rights. The entire $250,000 limit applies to the joint account, not split among the owners.
  • Retirement accounts: CDs held in an IRA, Roth IRA, SEP-IRA, or similar retirement account. These are insured separately from your personal CDs.
  • Trust accounts: CDs held in a revocable living trust or testamentary trust. Coverage depends on the trust structure and beneficiaries.
  • Accounts for a minor: A CD held in a custodial account for a child is insured separately from the custodian's personal CDs.

If you are unsure whether your CD falls into one of these categories, the bank's account paperwork will show the ownership type. The FDIC's website also has a tool called the FDIC Coverage Calculator where you can enter your account details and see exactly how much is insured.

How to verify your bank is FDIC-insured

Before opening a CD, confirm that the bank is an FDIC member. The easiest way is to use the FDIC Bank Find tool on the FDIC's official website (fdic.gov). Enter the bank's name and state, and the tool will show whether it is insured, its certificate number, and the date it joined the FDIC.

You can also ask the bank directly. FDIC-insured banks are required to display the FDIC logo and insurance notice in their lobbies and on their websites. If a bank does not mention FDIC insurance or cannot tell you its FDIC certificate number, that is a red flag.

Online banks are often FDIC-insured if they are subsidiaries of or operate under a larger FDIC member bank. The bank's website should state this clearly. If it does not, use the Bank Find tool to check.

What FDIC insurance does and does not cover

FDIC insurance covers the principal (the amount you deposited) plus accrued interest up to the $250,000 limit. If your CD matures and you do not withdraw the money, the interest continues to accrue and is covered until the total reaches $250,000.

FDIC insurance does not cover losses from market fluctuations, fraud by the bank, or penalties you pay for early withdrawal. It also does not cover CDs held at institutions that are not FDIC members, such as brokerage firms or non-bank investment companies. If a brokerage firm sells you a CD, the CD itself may be issued by an FDIC-insured bank, but the brokerage firm's failure would not be covered by FDIC insurance.

The insurance also does not cover CDs purchased through a brokerage as part of a larger investment portfolio. These are sometimes called brokered CDs, and they may be issued by FDIC-insured banks but held in a way that complicates coverage. If you are considering a brokered CD, ask the brokerage firm to explain the FDIC coverage in writing.

FDIC insurance during a bank failure

If an FDIC-insured bank fails, the FDIC steps in to protect depositors. The agency typically arranges for another bank to take over the failed bank's deposits, and your CD transfers to the new bank with the same terms and maturity date. You do not lose access to your money, and the interest rate does not change.

In rare cases where no bank takes over the failed bank's deposits, the FDIC pays you directly. This process can take time — the FDIC aims to pay within a few business days, but it may take longer if records are incomplete or if there are complications. You will receive payment up to the $250,000 limit per ownership category.

Bank failures are uncommon in the United States. The FDIC maintains a fund paid for by member banks' insurance premiums, and this fund has covered all depositor losses since the FDIC was created in 1933. No depositor with FDIC-insured funds has lost money due to a bank failure.

CDs at credit unions and non-bank institutions

Credit unions offer CDs that are insured by the National Credit Union Administration (NCUA), not the FDIC. The coverage is the same — $250,000 per depositor per credit union per ownership category — but the insuring agency is different. You can verify NCUA coverage using the NCUA's Credit Union Locator tool on its website.

Money market funds, brokerage CDs, and CDs sold through investment firms are generally not FDIC-insured, even if the underlying CD is issued by an FDIC member bank. The structure of how the CD is held affects coverage. If you buy a CD through a broker or investment firm, ask in writing whether it is FDIC-insured and request documentation.

Some brokerage firms offer FDIC-insured CDs through a network of banks, where your money is split across multiple institutions to stay within the $250,000 limit at each one. These are sometimes called sweep accounts or network CDs. The brokerage firm should explain the coverage structure before you invest.

Frequently Asked Questions

What happens to my CD if the bank fails?

The FDIC typically arranges for another bank to take over the failed bank's deposits, and your CD moves to the new bank with the same terms and maturity date. If no bank takes over, the FDIC pays you directly, up to $250,000 per ownership category. You do not lose money on an FDIC-insured CD due to bank failure.

Can I have more than $250,000 insured at one bank?

Yes, if you use different ownership categories. A personal CD, a joint CD, a retirement account CD, and a trust CD at the same bank are each insured up to $250,000 separately. You can also split money across multiple banks to insure more than $250,000 total.

Are online bank CDs FDIC-insured?

Most online banks are FDIC-insured subsidiaries of larger banks. Check the bank's website for the FDIC logo and insurance statement, or use the FDIC Bank Find tool to verify. If the online bank is not FDIC-insured, it will say so.

Is a CD at a brokerage firm FDIC-insured?

It depends on the structure. A CD issued by an FDIC-insured bank but held through a brokerage may have limited or no FDIC coverage. Ask the brokerage firm in writing whether the CD is FDIC-insured and request documentation of the coverage amount.

Do I need to do anything to activate FDIC insurance on my CD?

No. FDIC insurance is automatic at member banks. You do not pay for it or sign up for it. The bank handles the coverage as part of its FDIC membership.