Yes, certificates of deposit 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 federal deposit insurance. This means if the bank fails, the federal government backs your money up to $250,000. The insurance covers the principal you deposited plus any interest that has been earned, as long as the total does not exceed the limit.

The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress. It does not prevent banks from failing, but it guarantees that depositors will not lose their money when one does. This protection has been in place since 1933 and applies automatically — you do not need to sign up for it or pay a fee.

The $250,000 limit applies per depositor, per bank, per account ownership category. This means you can have $250,000 in a CD at one bank and another $250,000 in a CD at a different bank, and both are fully covered. If you have multiple CDs at the same bank in your own name, the insurance adds them together and covers up to $250,000 total across all of them.

Key Takeaways

  • FDIC insurance covers CDs up to $250,000 per depositor at each bank, including both principal and earned interest.
  • The coverage is automatic at any bank that displays the FDIC logo or lists itself as FDIC-insured — you do not need to take any action.
  • If you have more than $250,000 to deposit, you can split it across multiple banks to keep all of it insured.
  • Online banks and credit unions may have different insurance rules, so check whether your institution is FDIC-insured before opening a CD.

How to verify your bank is FDIC-insured

Not every financial institution that accepts deposits is FDIC-insured. Credit unions are insured by the National Credit Union Administration (NCUA), which works similarly but is a separate program. Some online banks are FDIC-insured and some are not.

The easiest way to check is to look for the FDIC logo on the bank's website or ask a teller directly. You can also search the FDIC's official bank database at banks.data.fdic.gov. Enter the bank's name and your state, and the database will tell you whether it is insured and show you the exact coverage limits for each account type you hold there.

If a bank is FDIC-insured, it is required by law to display that information prominently. If you cannot find it after looking, that is a sign to ask directly before depositing money.

What happens to your CD if the bank fails

If an FDIC-insured bank fails, the FDIC steps in and pays depositors directly. In most cases, you receive your money within a few business days. The FDIC does not mail checks — it deposits the funds into an account at another bank, usually one that has taken over the failed bank's operations.

Your CD does not automatically transfer to the new bank. Instead, you receive the insured amount (up to $250,000) and the CD contract ends. If you had a CD earning 5% that was supposed to mature in six months, you get your money now rather than waiting for maturity. You do not receive the interest that would have accrued during the remaining term.

Bank failures are rare. The FDIC maintains a fund paid by banks themselves, not by taxpayers. Since 2008, fewer than 20 banks have failed in the United States in any given year, and FDIC insurance has protected depositors in every case.

How the $250,000 limit works with joint accounts and special categories

The $250,000 limit is per depositor, per bank, per account ownership category. This means the way you title your account matters. A CD in your name alone is covered separately from a CD you hold jointly with a spouse, which is covered separately from a CD held in trust for a beneficiary.

If you and your spouse each have individual CDs at the same bank, you each get $250,000 of coverage — $500,000 total. If you have a joint CD together, that joint account gets its own $250,000 of coverage. These do not combine or reduce each other.

Retirement accounts like IRAs also have their own $250,000 coverage category. A regular CD and an IRA CD at the same bank are both insured separately. If you are unsure how your account is titled or whether multiple CDs you hold are being counted separately, the FDIC database search mentioned above will show you the exact coverage for each account.

What FDIC insurance does not cover

FDIC insurance covers the money in your CD and the interest it earns, but it does not cover losses from fraud, theft, or your own mistakes. If someone steals your CD or you send money to a scammer, the FDIC does not reimburse you. The insurance also does not protect you if you lose money because you withdrew early and paid an early withdrawal penalty.

The insurance applies only to deposits at the bank itself. If you invest CD money in stocks, bonds, mutual funds, or other securities through the bank, those investments are not FDIC-insured. Some banks offer these products alongside CDs, so make sure you understand what you are buying.

FDIC insurance also does not cover safe deposit boxes or their contents, even if the box is at an FDIC-insured bank. The contents of a safe deposit box are your responsibility to insure separately if they are valuable.

Splitting deposits across banks to stay fully insured

If you have more than $250,000 to deposit in CDs, you can open accounts at multiple FDIC-insured banks and keep all of your money insured. Each bank provides a separate $250,000 of coverage, so $500,000 across two banks is fully covered, $750,000 across three banks is fully covered, and so on.

You do not need to use different bank names or complicated structures. Simply open a CD at Bank A and a CD at Bank B. The FDIC tracks coverage by the bank's charter number, not by the bank's name. If two banks share the same charter (because one acquired the other), they count as one bank for insurance purposes, so deposits at both locations combine toward the $250,000 limit.

The FDIC website includes a tool called the FDIC Coverage Calculator that lets you enter your accounts and shows you exactly how much is insured at each bank. This is useful if you hold multiple CDs, joint accounts, or retirement accounts and want to verify you are fully covered.

Frequently Asked Questions

Does FDIC insurance cover CDs at online banks?

Only if the online bank is FDIC-insured. Many online banks are, but not all. Search the FDIC database or look for the FDIC logo on the bank's website. If the bank is FDIC-insured, your CD is covered the same way as at a brick-and-mortar bank.

What if I have a CD that earns more than $250,000 in interest?

The $250,000 limit includes both principal and interest. If you deposit $200,000 in a CD and it earns $60,000 in interest, the total is $260,000. The FDIC covers $250,000 and you lose $10,000 of the interest. To stay fully covered, keep your principal plus expected interest under $250,000 per bank.

Are CDs at credit unions FDIC-insured?

No. Credit unions are insured by the NCUA, not the FDIC. The coverage limit is the same ($250,000 per depositor per credit union), but it is a separate program. Check whether your credit union is NCUA-insured the same way you would check for FDIC insurance.

If I move my CD to a different bank, does the insurance reset?

No. Insurance is based on where the CD is held at any given moment. If you move a CD from Bank A to Bank B, the coverage at Bank A ends and coverage at Bank B begins. The insurance does not reset or increase — it simply applies at whichever bank holds your account.

Can I lose FDIC coverage by withdrawing my CD early?

No. Early withdrawal penalties do not affect your insurance coverage. If you withdraw early and pay a penalty, the FDIC still covers the remaining balance up to $250,000. The penalty is a cost you pay, not a loss of insurance protection.