Yes, money market accounts held at banks are insured by the FDIC up to $250,000 per depositor, per bank

Money market accounts at FDIC-insured banks receive the same federal deposit insurance as savings accounts and checking accounts. If the bank fails, the FDIC will reimburse you for balances up to $250,000. This protection applies to each depositor separately, so if you and your spouse each own an account at the same bank, you each get $250,000 of coverage.

The catch is that this insurance only covers banks, not investment firms. Money market accounts sold by brokerage firms or investment companies are not FDIC-insured. Before you open a money market account, you need to confirm whether the institution holding it is a bank or an investment firm. The difference determines whether your money is protected.

Key Takeaways

  • Money market accounts at FDIC-insured banks are covered up to $250,000 per person, per bank, the same as any other deposit account.
  • Money market accounts at brokerages or investment firms are not FDIC-insured, though some may be protected by SIPC (Securities Investor Protection Corporation) instead.
  • If you have more than $250,000 to deposit, you can spread it across multiple banks to keep all of it insured.
  • The FDIC insurance covers the account balance as it stands on the day the bank fails — it does not protect against market losses or interest rate changes.

How FDIC insurance works for money market accounts

The Federal Deposit Insurance Corporation (FDIC) is a government agency that insures deposits at member banks. When you open a money market account at a bank that displays the FDIC logo or states it is FDIC-insured, your deposits are automatically covered. You do not need to sign up, pay a fee, or do anything extra — the coverage is built in.

The $250,000 limit applies to the total of all your deposits at that one bank, across all account types combined. If you have a checking account with $100,000 and a money market account with $200,000 at the same bank, your total coverage is $250,000. The $50,000 over the limit would not be insured. However, if you move the money market account to a different FDIC-insured bank, both accounts become fully covered because they are now at separate institutions.

FDIC insurance covers the balance on the day the bank fails. It does not protect you if the account earns less interest than you expected, or if you lose money due to market conditions. Money market accounts at banks are not investment accounts — they are deposit accounts that earn interest. The FDIC insures the deposit itself, not the returns.

Money market accounts at brokerages are not FDIC-insured

If you open a money market account through a brokerage firm like Fidelity, Charles Schwab, or E*TRADE, that account is not covered by FDIC insurance. Brokerages are investment firms, not banks. Their money market accounts are typically invested in short-term securities like Treasury bills and commercial paper, which means your money is at risk if those investments lose value.

Brokerage money market accounts may be covered by SIPC (Securities Investor Protection Corporation) instead, but SIPC protection is different and narrower than FDIC insurance. SIPC covers up to $500,000 per customer per brokerage firm, but only if the brokerage fails — not if your investments decline. SIPC also does not cover losses from poor investment performance or fraud by the brokerage.

Before you open a money market account, check whether the institution is a bank or a brokerage. If the website or account paperwork does not clearly state "FDIC-insured," contact the institution and ask directly. You can also search the FDIC's bank database at fdic.gov to confirm whether a specific bank is insured.

What happens to your money if the bank fails

Bank failures are rare in the United States, but they do occur. When an FDIC-insured bank fails, the FDIC steps in as the insurer of last resort. The agency will either arrange for another bank to take over the failed bank's deposits, or it will pay depositors directly from the FDIC insurance fund.

In most cases, you will not notice a gap in access to your money. The FDIC typically transfers deposits to a healthy bank within one or two business days. You may receive a new debit card and online login credentials, but your balance remains intact and available. The FDIC has never failed to pay insured deposits in full since it was created in 1933.

Spreading deposits across multiple banks to increase coverage

If you have more than $250,000 in savings, you can keep all of it insured by opening accounts at different FDIC-insured banks. Each bank provides a separate $250,000 of coverage. For example, if you have $500,000, you could place $250,000 at Bank A and $250,000 at Bank B, and both amounts would be fully insured.

This strategy works because FDIC insurance is calculated per depositor, per bank. The same person at two different banks counts as two separate accounts for insurance purposes. You can also increase coverage by opening joint accounts — a joint account receives its own $250,000 of coverage separate from your individual account at the same bank.

Some people use a service called a sweep account to manage this automatically. A sweep account moves money between multiple banks to keep each balance under the $250,000 limit. However, sweep accounts are typically offered by investment firms and may not provide FDIC insurance on all the money. Read the fine print before using one.

The difference between FDIC and SIPC protection

FDIC insurance and SIPC protection sound similar but serve different purposes. The FDIC insures deposits at banks — money you have placed there, whether in a checking account, savings account, or money market account. SIPC protects customers of brokerages — investment firms that buy and sell securities on your behalf.

FDIC insurance covers you if the bank fails. SIPC covers you if the brokerage fails and cannot return your securities or cash. Neither one protects you from investment losses. If you buy a stock through a brokerage and the stock price falls, SIPC does not reimburse you. Similarly, if a bank's money market account earns less interest than you expected, FDIC insurance does not compensate you for the lost earnings.

Money market accounts at banks are FDIC-insured. Money market accounts at brokerages may be SIPC-protected, but you should confirm this with the brokerage before opening the account. The level of protection matters if you are storing a large sum of money and want to know what happens if the institution fails.

How to verify FDIC insurance before opening an account

Before you deposit money into a money market account, take two minutes to confirm the institution is FDIC-insured. Look for the FDIC logo on the bank's website, usually displayed in the footer or on the account information page. The logo typically says "Member FDIC" or "FDIC-Insured."

If you do not see the logo, search the FDIC's Bank Find tool at fdic.gov/BankFind. Type in the bank's name and location, and the tool will tell you whether it is insured and what the coverage limits are. You can also call the bank's customer service line and ask directly: "Is this account FDIC-insured?" A legitimate bank will answer yes immediately.

For brokerage money market accounts, look for SIPC protection instead. The brokerage should display a SIPC logo or statement on its website. You can also check the SEC's list of registered brokers at sec.gov. Brokerage money market accounts are not the same as bank money market accounts, and the protection is different.

Frequently Asked Questions

What if I have more than $250,000 at one bank?

The amount over $250,000 is not insured. To protect all your money, open accounts at different FDIC-insured banks. Each bank provides a separate $250,000 of coverage. You can also open a joint account at the same bank — a joint account receives its own $250,000 of coverage in addition to your individual account coverage.

Does FDIC insurance cover money market accounts at credit unions?

No. Credit unions are insured by the NCUA (National Credit Union Administration), not the FDIC. NCUA coverage works similarly — up to $250,000 per member, per credit union — but it is a separate system. If you have a money market account at a credit union, confirm it is NCUA-insured, not FDIC-insured.

If the bank fails, how long does it take to get my money?

The FDIC typically transfers deposits to another bank within one or two business days. You will have access to your money and can withdraw it or move it elsewhere. In rare cases where no bank takes over the deposits, the FDIC pays you directly, which may take a few weeks.

Does FDIC insurance protect me if I lose money on my investments?

No. FDIC insurance covers the deposit balance if the bank fails. It does not protect you from investment losses, market declines, or poor returns. Money market accounts at banks are deposit accounts, not investment accounts, so this is usually not an issue — but the distinction matters if you are comparing bank money market accounts to brokerage money market accounts.

Can I increase my FDIC coverage by opening accounts under different names?

No. FDIC insurance is tied to your Social Security number or tax ID, not to the account name. Opening multiple accounts under variations of your name at the same bank does not increase your coverage. The only way to increase coverage is to open accounts at different banks or to open joint accounts with other people.