OpenBank accounts are FDIC insured up to $250,000 per depositor, per bank, per ownership category

OpenBank is a division of Customers Bank, which holds an FDIC charter. That means your deposits in an OpenBank savings account are covered by Federal Deposit Insurance Corporation (FDIC) protection. If the bank fails, the FDIC will reimburse you up to $250,000 for each account ownership type you hold there.

The $250,000 limit applies per person, per bank, per category. If you have a savings account in your name alone and a joint savings account with your spouse at the same bank, each is insured separately up to $250,000. Money market accounts and checking accounts at OpenBank also count toward FDIC coverage, but they are insured under the same $250,000 limit as your savings account if they are in the same ownership category.

This protection is automatic. You do not need to sign up for it or pay a fee. It covers the full balance in your account as long as you stay within the $250,000 limit per category.

Key Takeaways

  • OpenBank deposits are FDIC insured because OpenBank operates as a division of Customers Bank, which is an FDIC member.
  • The standard coverage limit is $250,000 per person, per bank, per ownership type, so a single account in your name is covered up to that amount.
  • Joint accounts, retirement accounts, and accounts held in trust each have their own separate $250,000 coverage limit at the same bank.
  • FDIC coverage is automatic and costs you nothing — you do not need to register or take any action to be protected.

How the $250,000 limit works across different account types

The $250,000 FDIC limit does not mean you can only have $250,000 total at OpenBank. It means each account ownership category is insured separately. If you hold multiple accounts in different categories, each one gets its own $250,000 protection.

A single account (in your name alone) is insured up to $250,000. A joint account (shared with another person) is insured up to $250,000 per owner, so a joint account with your spouse is covered for $250,000 for you and $250,000 for your spouse — a total of $500,000 on that one account. A retirement account (like an IRA held at OpenBank) is insured separately, also up to $250,000. A trust account is insured up to $250,000 per beneficiary, depending on how the trust is structured.

If you deposit $300,000 in a single savings account at OpenBank, only $250,000 is covered by FDIC insurance. The remaining $50,000 is not protected. If you want to insure more than $250,000 in your own name, you would need to open accounts at different FDIC member banks — each bank's $250,000 limit is separate.

What FDIC insurance actually protects

FDIC insurance covers the money you deposit — your principal and any interest the account has earned. It does not cover investment losses, fees, or penalties. If you hold stocks, bonds, or mutual funds through OpenBank, those are not covered by FDIC insurance; they fall under different protections called SIPC (Securities Investor Protection Corporation).

FDIC coverage applies only if the bank fails. It does not protect you from fraud, theft, or your own mistakes — like sending money to the wrong person or falling victim to a scam. If someone hacks your account or you authorize a transfer you later regret, FDIC insurance will not reimburse you. You would need to report the issue to OpenBank and work through their fraud investigation process.

The FDIC also does not cover safe deposit boxes, cashier's checks, or money orders. If you rent a safe deposit box at OpenBank and it is damaged or broken into, FDIC insurance does not apply — the bank's liability rules do.

When FDIC coverage does not apply

FDIC insurance only protects you if the bank itself fails and closes. It does not protect you from the bank's mistakes, poor service, or even if the bank decides to close your account. If OpenBank freezes your account due to suspected fraud or closes it for policy violations, your money is still yours — the bank must return it to you — but FDIC insurance is not involved in that dispute.

Coverage also does not apply to money held outside the United States. If you wire funds to an international account, FDIC protection ends once the money leaves the U.S. banking system. Some OpenBank accounts may have restrictions on international transfers anyway, so check your account terms.

If you are a business owner, business accounts at OpenBank are insured separately from personal accounts, but the same $250,000 limit applies per business entity. A sole proprietorship account is treated differently from an LLC or corporation account, so each has its own coverage limit.

How to check if your balance is fully covered

The FDIC provides a tool called the FDIC Coverage Calculator on their website (fdic.gov). You can enter your account details — the bank name, the type of account, the ownership structure, and your balance — and it will tell you exactly how much is covered. This is useful if you have multiple accounts or unusual ownership arrangements.

You can also contact OpenBank directly and ask them to confirm your coverage. They should be able to tell you whether your account structure qualifies for the full $250,000 or if you have multiple categories that each receive separate coverage. Keep records of any confirmation they provide.

If you are close to or over the $250,000 limit in a single account category, moving the excess to another FDIC member bank is a straightforward way to ensure all your money is covered. You can open an account at any other FDIC member bank — there is no penalty for splitting your deposits across institutions.

Why FDIC insurance exists and what it costs you

FDIC insurance was created after the bank failures of the Great Depression. It guarantees that if a bank fails, depositors will not lose their savings. The FDIC is funded by insurance premiums that banks pay — not by taxpayers or by you. You never pay a fee for FDIC coverage, and the bank cannot charge you for it.

Banks pay the FDIC a small percentage of their deposits as insurance premiums. This cost is built into the bank's operations, not passed to customers. OpenBank includes FDIC coverage in all its deposit accounts at no extra charge to you.

In the rare event that a bank fails, the FDIC steps in, takes over the bank's assets, and pays out covered deposits. This process usually takes a few days to a few weeks. Depositors are notified by mail, and the FDIC either transfers accounts to another bank or sends a check for the covered amount.

Comparing OpenBank's FDIC coverage to other banks

All FDIC member banks offer the same $250,000 coverage limit per category. There is no difference in FDIC protection between OpenBank and any other FDIC member bank — whether it is a large national bank, a regional bank, or an online bank. The protection is the same.

What varies between banks is the account features, interest rates, fees, and customer service. OpenBank may offer different rates or account types than another bank, but the FDIC insurance itself is identical. If you are choosing between banks, FDIC coverage should not be the deciding factor — it is a baseline protection that all member banks provide.

Some banks advertise "FDIC insured" as a selling point, but this is standard for all legitimate banks. It is not a competitive advantage. What matters more is whether the bank offers the features and rates you need.

Frequently Asked Questions

What happens to my OpenBank account if the bank fails?

The FDIC will take over and either transfer your account to another bank or send you a check for the covered amount (up to $250,000). You will be notified by mail. The process usually takes a few days to a few weeks. Your covered balance is protected — you will not lose money.

If I have $300,000 in my OpenBank savings account, how much is covered?

Only $250,000 is covered by FDIC insurance. The remaining $50,000 is uninsured. To cover the full amount, you could move $50,000 to a savings account at a different FDIC member bank, which would give that portion its own $250,000 coverage limit.

Are money market accounts at OpenBank FDIC insured?

Yes, money market accounts at OpenBank are FDIC insured up to $250,000 per ownership category, the same as savings accounts. If you have both a savings account and a money market account in your name alone at OpenBank, they share the same $250,000 limit combined.

Does FDIC insurance cover me if I am a victim of fraud or theft?

No. FDIC insurance only covers bank failure. If your account is hacked or you send money to a scammer, you need to report it to OpenBank and work through their fraud investigation process. Contact your bank immediately if you notice unauthorized activity.

Can I have more than $250,000 covered at OpenBank?

Yes, if you use different ownership categories. A joint account with your spouse is covered for $250,000 per person ($500,000 total). An IRA is covered separately up to $250,000. A trust account is covered based on the number of beneficiaries. Ask OpenBank about your specific situation to confirm coverage.