Are Money Market Accounts Protected by FDIC Insurance?

Money market accounts held at banks are FDIC insured up to $250,000 per depositor, per bank

If your money market account is at a bank—not a brokerage or investment firm—it carries the same FDIC (Federal Deposit Insurance Corporation) protection as a regular savings account. That means if the bank fails, the FDIC will reimburse you up to $250,000 in that account. The coverage applies to the account balance plus any interest earned, as long as the total does not exceed the limit.

The critical word is "bank." Money market accounts sold through investment brokerages, mutual fund companies, or insurance firms are not FDIC insured. These accounts are typically invested in money market mutual funds, which are securities—not deposits. If you hold one of these accounts and the firm fails, your money is not protected by the FDIC. Instead, it may be protected under different rules, depending on the firm's type and structure.

The $250,000 limit applies per depositor, per bank. If you have multiple accounts at the same bank—a money market account, a checking account, and a savings account—the FDIC adds them together and covers only $250,000 of the combined total. If you have the same account type at two different banks, each bank's $250,000 coverage is separate.

Key Takeaways

Money market accounts at FDIC-insured banks are covered up to $250,000 per depositor, the same as savings accounts.
Money market accounts at brokerages or investment firms are not FDIC insured because they hold securities, not deposits.
The $250,000 limit combines all deposit accounts you hold at the same bank, not per account.
You can increase your FDIC coverage by opening accounts at different banks or by using joint account ownership.
Check your bank's FDIC status on the FDIC's official website before opening a money market account.

How to tell if your money market account is at an FDIC-insured bank

Look at the institution where you opened the account. If it is a commercial bank, savings bank, or savings and loan association, it is almost certainly FDIC insured. If it is a brokerage firm (like Fidelity, Charles Schwab, or E-Trade), a mutual fund company, or an insurance company, the account is not FDIC insured—even if the firm itself is well-known and stable.

You can verify FDIC insurance status directly. Visit the FDIC's Bank Find tool at banks.fdic.gov, enter your bank's name, and see whether it appears on the list of insured institutions. The tool also shows you the exact coverage limits for different account types at that specific bank. If your bank does not appear, it is not FDIC insured.

Your bank statement or account agreement should also state whether the account is FDIC insured. Many banks include this information in the fine print or in a separate disclosure document. If you are unsure, call the bank directly and ask whether your money market account is covered by FDIC insurance.

What FDIC insurance covers and what it does not

FDIC insurance covers the account balance and accrued interest, but only up to $250,000. It does not cover losses from poor investment performance, fraud by the account holder, or unauthorized withdrawals (though your bank may have separate protections for those). It also does not cover fees charged by the bank or interest you would have earned if the bank had not failed.

The coverage is automatic—you do not need to register or do anything to activate it. As long as your account is at an FDIC-insured bank and your balance is under $250,000, you are covered. The FDIC steps in only if the bank fails, which is rare. Since 2008, the FDIC has insured deposits at hundreds of failed banks, but individual depositors with balances under $250,000 have been made whole in every case.

How joint accounts and multiple ownership categories affect your coverage

If you own a money market account jointly with another person, the FDIC covers up to $250,000 for each owner. So a joint account with two owners is covered for up to $500,000 total—$250,000 per person. This is separate from any individual accounts you hold at the same bank.

The FDIC also recognizes other ownership categories: accounts held in trust, retirement accounts (IRAs, SEP-IRAs, and similar), and accounts owned by a business. Each category has its own $250,000 limit at the same bank. For example, you could have a $250,000 individual money market account, a $250,000 joint account with your spouse, and a $250,000 IRA at the same bank, and all three would be fully covered.

This structure is useful if you have more than $250,000 to deposit. Instead of splitting money across multiple banks, you can use different ownership categories at one bank and stay fully insured. However, the rules are specific—the FDIC will not recognize a category unless it is set up correctly. If you are unsure whether your account structure qualifies, ask your bank or check the FDIC's coverage calculator on their website.

Money market mutual funds and why they are not FDIC insured

A money market mutual fund is a type of investment fund that holds short-term debt securities—Treasury bills, commercial paper, and similar instruments. When you buy shares in a money market mutual fund, you are buying a security, not making a deposit. Because it is a security, the FDIC does not insure it.

Money market mutual funds are regulated by the Securities and Exchange Commission (SEC), not the FDIC. They are generally very safe—they aim to maintain a stable share price of $1 and rarely lose value—but they are not may provide. If the fund's holdings decline in value or if the fund manager fails, you could lose money. The fund is also subject to market risk in ways that a bank deposit is not.

Some brokerages offer "money market sweep" features that automatically move uninvested cash into a money market mutual fund. If you want FDIC insurance on that cash, ask your broker whether they offer a sweep into an FDIC-insured deposit account instead. Many do, though the interest rate may be lower than a mutual fund.

Steps to confirm your money market account is FDIC insured

Start by identifying where your account is held. If you opened it at a bank's website or branch, it is likely FDIC insured. If you opened it through a brokerage or investment app, it is likely not. When in doubt, ask.

Next, visit banks.fdic.gov and use the Bank Find tool. Enter your bank's name and state. If it appears on the list, note the coverage limits shown for your account type. If it does not appear, your account is not FDIC insured.

Finally, check your account balance against the $250,000 limit. If you have multiple accounts at the same bank, add them together (unless they are in different ownership categories, which have separate limits). If your total is under $250,000, you are fully covered. If it is over, consider moving the excess to another bank or into a different ownership category at the same bank.

What happens if your bank fails

If an FDIC-insured bank fails, the FDIC takes control of the bank's assets and arranges either a merger with another bank or a payout to depositors. In most cases, the FDIC arranges a merger quickly—often over a weekend—and your account simply transfers to the new bank with no action required on your part. Your money market account continues to function normally.

If a merger is not possible, the FDIC pays out deposits directly. This process typically takes a few weeks. You will receive a check or a transfer to an account you designate, up to the $250,000 limit. If your balance exceeds $250,000, the amount over the limit is not covered and becomes part of the bank's bankruptcy proceedings.

Bank failures are uncommon. The FDIC's insurance fund is backed by premiums paid by banks, not by taxpayers. Since the FDIC was created in 1933, no depositor with a balance under the insurance limit has lost money due to a bank failure.

Frequently Asked Questions

Is my money market account at a credit union FDIC insured?

No. Credit unions are insured by the NCUA (National Credit Union Administration), not the FDIC. NCUA coverage is similar—up to $250,000 per depositor—but it is a separate system. If you hold a money market account at a credit union, check the NCUA's website to confirm coverage.

What if I have more than $250,000 to keep safe?

Open accounts at different FDIC-insured banks. Each bank's $250,000 limit is separate. You can also use different ownership categories—individual, joint, IRA, trust—at the same bank, and each category has its own $250,000 limit. The FDIC's coverage calculator can help you plan the right structure.

Does FDIC insurance cover money I lose to fraud or theft?

FDIC insurance does not cover fraud or theft. However, your bank may have separate protections. If someone steals your login credentials and withdraws money, report it to your bank immediately. Banks are required to investigate and often reimburse customers for unauthorized transfers.

If I move my money market account to a different bank, do I lose FDIC coverage?

No. FDIC coverage is tied to the bank, not to the account. When you move your account to a new FDIC-insured bank, coverage transfers with it. There is no gap in protection as long as the new bank is FDIC insured.

Can I increase my FDIC coverage by opening multiple accounts at the same bank?

Only if the accounts are in different ownership categories. Multiple individual accounts at the same bank are added together and covered as one account up to $250,000 total. But an individual account, a joint account, and an IRA at the same bank each have their own $250,000 limit.

This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.