Yes, certificates of deposit are FDIC insured up to $250,000 per depositor, per bank, per ownership category

A certificate of deposit (CD) held at an FDIC-insured bank is protected by federal deposit insurance. This means if the bank fails, you will receive your principal and accrued interest up to the insurance limit, even if the bank cannot pay it back from its own assets. The Federal Deposit Insurance Corporation (FDIC) is a government agency that guarantees deposits at member banks.

The $250,000 limit applies to each depositor at each bank. If you have $250,000 in a CD at Bank A and $250,000 in a CD at Bank B, both are fully covered because they are at different institutions. If you have two CDs totaling $300,000 at the same bank under the same ownership, only $250,000 is covered.

FDIC insurance covers the CD balance plus any interest that has accrued up to the maturity date or the date the bank fails, whichever comes first. You do not need to do anything to activate this coverage — it is automatic at any bank that displays the FDIC logo or states it is an FDIC member.

Key Takeaways

  • All CDs at FDIC-insured banks are covered up to $250,000 per person per bank, including accrued interest.
  • The $250,000 limit resets for each separate bank, so you can hold multiple fully covered CDs at different institutions.
  • Joint account CDs, retirement account CDs, and trust CDs have separate insurance limits, allowing higher total coverage under different ownership structures.
  • You can verify a bank's FDIC status using the FDIC's Bank Find tool on its website before opening a CD.

How the $250,000 limit works across multiple CDs

The FDIC insurance limit is per depositor, per bank, per ownership category. This means the same person can hold more than $250,000 in CDs and still be fully covered if those CDs are spread across different banks or held under different ownership structures.

If you have $150,000 in a CD at Bank A and $150,000 in a CD at Bank B, both amounts are fully covered because they are at different banks. The $250,000 limit does not combine across institutions. However, if you have $150,000 in one CD and $150,000 in another CD at the same bank, both under your individual name, the total of $300,000 is covered only up to $250,000. The second CD would have $100,000 uninsured.

If you and your spouse hold a joint CD at Bank A for $250,000, that is fully covered under the joint ownership category. If you also hold an individual CD at the same bank for $250,000, that is also fully covered because it is under a different ownership category. The FDIC treats joint accounts, individual accounts, retirement accounts, and trust accounts as separate categories for insurance purposes.

Different ownership categories that increase your coverage

The FDIC recognizes several ownership categories, and each one has its own $250,000 insurance limit at the same bank. This structure allows families and account holders with multiple roles to cover more total money at a single institution.

An individual account in your name alone is covered up to $250,000. A joint account with another person is covered up to $250,000 for the account as a whole, not per person. A retirement account — such as a traditional IRA, Roth IRA, or SEP-IRA held as a CD — is covered up to $250,000 separately from your individual accounts at the same bank. A trust account is also covered separately, up to $250,000 per beneficiary named in the trust, with a cap of $250,000 total per trust.

For example, you could hold a $250,000 individual CD, a $250,000 joint CD with your spouse, and a $250,000 IRA CD all at the same bank, and all three would be fully covered. The coverage does not combine across categories.

How to verify a bank's FDIC insurance status

Before opening a CD, confirm that the bank is FDIC-insured. Most banks that accept deposits are members, but some are not. The FDIC maintains a public database called Bank Find on its website where you can search by bank name, city, or state to see whether it is insured and what its insurance status is.

You can also look for the FDIC logo on the bank's website or in its branch. Banks are required to display the FDIC logo and state that deposits are insured if they are members. If a bank does not mention FDIC insurance or does not appear in the Bank Find database, do not open a CD there — your money will not be protected if the bank fails.

Some online banks and credit unions are FDIC-insured, while others are not. Credit unions are typically insured by the National Credit Union Administration (NCUA), which offers the same $250,000 coverage as the FDIC. Verify the insurance status regardless of whether the bank is online or brick-and-mortar.

What FDIC insurance does and does not cover

FDIC insurance covers the CD principal and accrued interest. It does not cover losses from market fluctuations, penalties for early withdrawal, or interest rate risk. If you withdraw money from a CD before maturity, the bank may charge a penalty that reduces your return, but the FDIC will still cover the remaining balance up to $250,000.

FDIC insurance also does not cover CDs held at banks that are not FDIC members, CDs purchased through a brokerage (which may have different insurance rules), or amounts over $250,000 per category at the same bank. If you have a brokered CD, the insurance coverage depends on how the brokerage structured the account — some brokered CDs are covered, but the rules are more complex than direct bank CDs.

The insurance covers the CD if the bank fails. It does not cover fraud, theft, or unauthorized withdrawals by someone else. If someone steals your CD or forges your signature, you would need to report it to the bank and pursue legal remedies; the FDIC insurance would not automatically pay out.

What happens if your bank fails

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 your money or your CD.

If no bank takes over the deposits, the FDIC pays out directly to depositors up to the insurance limit. This process usually takes a few days to a few weeks. You will receive your principal and accrued interest up to $250,000 per category. The FDIC has never failed to pay out insured deposits since it was created in 1933.

Bank failures are rare in the United States. The FDIC's role is to prevent panic and ensure that people can trust their banks with their money. Having FDIC insurance means you can focus on the CD's interest rate and terms without worrying about whether the bank will be able to pay you back.

Frequently Asked Questions

Is my CD covered if the bank is sold or merges with another bank?

Yes. If your bank merges with or is taken over by another bank, your CD is still FDIC-insured. The new bank inherits the FDIC insurance on your account. Your CD continues under the same terms unless the new bank offers you different options.

What if I have a CD in a different state — is it still covered?

Yes. FDIC insurance applies regardless of which state the bank is in. The coverage limit is per depositor, per bank, per ownership category, not per state. A CD at a bank in another state counts toward your $250,000 limit at that specific bank.

Are high-yield CDs at online banks FDIC insured?

Yes, if the online bank is FDIC-insured. Most online banks are FDIC members and offer the same $250,000 coverage as traditional banks. Check the bank's website or use the FDIC Bank Find tool to confirm its status before opening a CD.

Can I exceed the $250,000 limit and still be covered?

Only if you spread the money across different banks or use different ownership categories at the same bank. If you have $300,000 in individual CDs at one FDIC bank, only $250,000 is covered. The remaining $100,000 is not protected if the bank fails.

Does FDIC insurance cover CDs I buy through a brokerage?

Brokered CDs may be covered, but the rules are different from direct bank CDs. Some brokerages structure brokered CDs so each CD is insured separately up to $250,000, while others do not. Ask the brokerage about FDIC coverage before buying a brokered CD.