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. If the bank fails, the FDIC will reimburse you for the full balance of your CD, up to the insurance limit. This protection applies whether your CD earns 0.5% or 5% — the insurance coverage does not depend on the interest rate.

The $250,000 limit is per depositor per bank per ownership category. This means if you have $250,000 in a CD at Bank A and another $250,000 in a CD at Bank B, both are fully covered. But if you have two CDs totaling $300,000 at the same bank in your own name, only $250,000 is insured and $50,000 is not.

Not every financial institution is FDIC-insured. Credit unions use a different system called NCUA insurance. Online banks, traditional banks, and some smaller regional banks are FDIC members. You can check whether a specific bank is FDIC-insured by searching the FDIC's Bank Find tool on their website.

Key Takeaways

  • FDIC insurance covers CDs up to $250,000 per depositor per bank per ownership category, regardless of the interest rate or CD term.
  • The coverage limit resets at each different bank, so you can have multiple fully-insured CDs by spreading money across different institutions.
  • Only banks that display the FDIC logo or appear in the FDIC Bank Find database are covered; credit unions use NCUA insurance instead.
  • If a bank fails, the FDIC typically reimburses depositors within a few business days, and your CD interest accrues up to the failure date.

How the $250,000 limit works across multiple accounts

The FDIC insurance limit is per depositor, per bank, per ownership category. Understanding each part matters because it determines whether your money is fully protected or partially exposed.

"Per depositor" means the limit is tied to you as an individual. If you have a CD in your name alone, that is one depositor. If your spouse has a CD in their name alone at the same bank, that is a second depositor, and each of you gets the full $250,000 protection.

"Per bank" means the limit applies to each institution separately. You can have $250,000 in a CD at Chase and another $250,000 in a CD at Bank of America, and both are fully insured. The FDIC does not combine your balances across different banks.

"Per ownership category" refers to the legal structure of the account. A CD in your individual name is one category. A CD in a joint account with your spouse is a different category and gets its own $250,000 limit. A CD held in trust for a beneficiary is yet another category. This means a married couple can have up to $500,000 insured at one bank — $250,000 in individual accounts and $250,000 in a joint account.

What happens if your CD balance exceeds the insurance limit

If you deposit $300,000 into a single CD at one bank in your own name, the FDIC insures $250,000 and leaves $50,000 uninsured. If the bank fails, you receive $250,000 from the FDIC and lose the $50,000 that exceeded the limit.

This is why people with large sums often split their money across multiple banks or use ownership categories like joint accounts and trusts. A person with $500,000 could open a $250,000 CD in their individual name at Bank A and another $250,000 CD in their individual name at Bank B, keeping all of it insured.

The uninsured portion is not automatically lost — it depends on what happens to the bank. If the bank is sold to another institution, the new owner may honor the CD terms and pay you in full. But if the bank truly fails and no buyer emerges, the uninsured amount is at risk.

FDIC insurance does not cover all CD scenarios

FDIC insurance protects your principal and accrued interest if the bank fails. It does not protect you from other losses, such as early withdrawal penalties or opportunity cost if rates drop.

If you withdraw money from a CD before the maturity date, you typically pay a penalty — often a few months of interest. The FDIC does not reimburse this penalty. The insurance only covers what happens if the bank itself becomes insolvent.

FDIC insurance also does not cover CDs held at credit unions. Credit unions are insured by the National Credit Union Administration (NCUA), which operates similarly but is a separate system. NCUA coverage is also $250,000 per member per credit union per ownership category, but you must confirm the credit union is NCUA-insured.

How to verify your bank is FDIC-insured

Before opening a CD, confirm the bank is FDIC-insured. The easiest way is to look for the FDIC logo on the bank's website or in its physical locations. Most FDIC-insured banks display the logo prominently.

For absolute certainty, use the FDIC's Bank Find tool on fdic.gov. Enter the bank's name and state, and the tool will show whether it is FDIC-insured, its certificate number, and the date it joined the FDIC. This takes less than a minute and removes any doubt.

Online banks are often FDIC-insured even though they have no physical branches. Banks like Marcus, Ally, and Discover are FDIC members. Regional online banks and smaller institutions vary, so checking Bank Find is the only reliable way to know.

What the FDIC does if a bank fails

If an FDIC-insured bank fails, the FDIC steps in as the insurer of last resort. The agency does not prevent bank failures — it reimburses depositors when they occur.

The FDIC typically pays insured depositors within a few business days of the bank's closure. You receive payment up to the $250,000 limit per category. Your CD interest continues to accrue up to the date of the bank's failure, and that accrued interest counts toward your $250,000 limit.

In rare cases, the FDIC arranges for another bank to assume the failed bank's deposits and CDs. When this happens, your CD transfers to the new bank and continues under the same terms. You may not even notice the transition.

Ownership categories that affect your coverage

The FDIC recognizes several ownership categories, each with its own $250,000 limit at the same bank. Understanding these categories helps you structure your CDs to maximize coverage.

Individual accounts are CDs in your name alone. Joint accounts are CDs owned by two or more people with equal rights. A joint CD gets $250,000 of coverage, not $250,000 per joint owner. Revocable trust accounts are CDs held in trust for a named beneficiary; each beneficiary gets $250,000 of coverage. Irrevocable trust accounts are treated differently and may have lower coverage limits, so check with the FDIC if you use this structure.

A married couple can maximize coverage at one bank by opening an individual CD for each spouse ($500,000 total) plus a joint CD ($250,000), totaling $750,000 in coverage at that single institution. This requires separate accounts with different ownership structures.

Frequently Asked Questions

Do I lose my CD interest if the bank fails?

No. The FDIC covers both your principal and any interest that has accrued up to the date of the bank's failure. The accrued interest counts toward your $250,000 limit, so if your CD balance plus accrued interest exceeds $250,000, only the amount up to $250,000 is covered.

Is my CD insured if I bought it through a brokerage?

CDs purchased through a brokerage are FDIC-insured only if the underlying bank is FDIC-insured. However, brokered CDs are often treated as a separate ownership category, which may provide additional coverage. Ask your brokerage which bank issued the CD and confirm it is FDIC-insured.

What if I have a CD and a savings account at the same bank?

CDs and savings accounts are in different ownership categories at the FDIC. A $250,000 CD and a $250,000 savings account at the same bank are both fully covered because they are separate categories. Only accounts in the same category share the $250,000 limit.

Can I increase my coverage by adding a co-owner to an existing CD?

No. The FDIC coverage is determined by the account structure at the time of the bank's failure. Adding a co-owner after the CD is opened does not retroactively change the coverage category. If you want joint account coverage, you must open a new joint CD.

Are high-yield CDs less insured than regular CDs?

No. FDIC insurance covers all CDs at insured banks equally, regardless of the interest rate. A CD earning 5% has the same $250,000 coverage as a CD earning 0.5%. The rate does not affect the insurance protection.