Yes, certificates of deposit are FDIC insured up to $250,000 per depositor, per bank, per account 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, the FDIC will reimburse you for the money you deposited, up to the insurance limit. The coverage is automatic — you do not need to sign up for it or pay a fee.

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 in your name alone, only $250,000 is covered.

FDIC insurance covers the principal you deposited plus any interest earned up to the moment the bank fails. It does not cover losses from early withdrawal penalties or market fluctuations — those are not losses from bank failure, so insurance does not apply.

Key Takeaways

  • FDIC insurance covers CDs up to $250,000 per person per bank, and the coverage is automatic at any FDIC-insured institution.
  • The $250,000 limit resets for each different bank you use, so spreading CDs across multiple banks can protect larger amounts.
  • Joint account CDs, retirement account CDs, and trust CDs each have their own separate $250,000 coverage limit at the same bank.
  • You can verify a bank is FDIC-insured by searching the FDIC's Bank Find tool or looking for the FDIC logo on the bank's website.
  • FDIC insurance does not cover penalties for withdrawing early or protect you from interest rate risk if rates rise after you lock in your CD.

How the $250,000 limit works across multiple accounts

The FDIC counts all CDs you own in your individual name at one bank toward a single $250,000 limit. If you have a 1-year CD with $100,000 and a 5-year CD with $150,000 at the same bank, the total is $250,000 and all of it is covered. If you add a third CD with $50,000, only $250,000 of the three combined is insured — the extra $50,000 is not.

The limit is separate for each ownership category. A CD in your name alone, a joint CD with your spouse, and a CD in a revocable trust with you as the beneficiary all have independent $250,000 limits at the same bank. This means you can have up to $750,000 covered at one bank if you use all three categories, though most people do not need this structure.

Retirement accounts (IRAs, SEP-IRAs, and similar) also have their own separate $250,000 limit. A traditional IRA CD and a Roth IRA CD at the same bank are each covered up to $250,000.

Which banks are FDIC insured

Most banks are FDIC-insured, but not all. Credit unions are insured by the NCUA (National Credit Union Administration), which works the same way but is a separate program. Online banks, regional banks, and large national banks are typically FDIC-insured, but you should verify before opening a CD.

The FDIC maintains a searchable database called Bank Find on its website. You can search by bank name or location to confirm whether an institution is FDIC-insured and see the exact coverage limits that apply. If a bank is not listed, it is not FDIC-insured and your deposits are not protected by federal insurance.

Many banks display the FDIC logo on their website or in their physical branches. The logo is a blue rectangle with white text. If you do not see it and cannot find the bank in Bank Find, contact the bank directly and ask whether it is FDIC-insured before depositing money.

What FDIC insurance covers and does not cover

FDIC insurance covers the principal you deposited and all interest accrued up to the date the bank fails. If you deposited $10,000 in a CD that earned $200 in interest before the bank closed, the FDIC reimburses you $10,200. The coverage is limited to $250,000 total, so if your principal plus interest exceeds that, only $250,000 is protected.

FDIC insurance does not cover penalties you pay for withdrawing early. If you withdraw $5,000 from a CD before maturity and the bank charges a $200 penalty, the FDIC does not reimburse the penalty. The penalty is a contractual cost, not a loss from bank failure. Similarly, if you buy a CD and interest rates rise, the FDIC does not compensate you for the opportunity cost of being locked into a lower rate.

Insurance also does not apply if you lose access to your CD for reasons other than bank failure — for example, if you forget your password, lose your debit card, or have a dispute with the bank over account terms. Those are customer service issues, not insurable events.

How to maximize FDIC coverage with multiple CDs

If you have more than $250,000 to invest in CDs, you can protect all of it by spreading the money across different banks. Open a CD at Bank A for $250,000, a CD at Bank B for $250,000, and a CD at Bank C for any remaining amount. Each bank's CD is covered separately up to $250,000.

You can also use different ownership categories at the same bank to increase coverage. For example, you could open a CD in your individual name ($250,000 covered), a joint CD with your spouse ($250,000 covered), and a CD in a revocable trust ($250,000 covered) — all at the same bank, all fully insured. This approach works if you want to keep your money at one institution but need coverage for more than $250,000.

Before spreading money across banks, consider whether the extra interest from higher-yield CDs at different institutions is worth the added complexity. Some banks offer higher rates than others, so comparing rates across institutions may increase your earnings enough to justify the extra accounts.

What happens if your bank fails

If an FDIC-insured bank fails, the FDIC takes over and typically transfers your CD to another bank. You keep your CD with the same terms and maturity date — nothing changes from your perspective except the bank name on your statements. The FDIC handles the transition; you do not need to do anything.

In rare cases where the FDIC cannot transfer your account to another bank, the FDIC sends you a check for the insured amount (up to $250,000) within a few business days. This has happened only a handful of times in recent history. The FDIC has a strong track record of protecting depositors — no one has lost FDIC-insured deposits since the program began in 1933.

If your CD balance exceeds $250,000 at the time the bank fails, the FDIC reimburses only $250,000. The amount over the limit is considered a claim against the bank's assets and may recover some money, but there is no may provide. This is why spreading large amounts across multiple banks is important if you want full protection.

Frequently Asked Questions

Do I need to do anything to get FDIC insurance on my CD?

No. FDIC insurance is automatic at any FDIC-insured bank. You do not need to sign up, pay a fee, or take any action. The moment you deposit money into a CD at an FDIC-insured bank, you are covered up to $250,000.

What if I have a CD at an online bank — is it still FDIC insured?

Yes, if the online bank is FDIC-insured. Most online banks are FDIC-insured and often offer higher CD rates than traditional banks because they have lower overhead costs. Verify the bank in the FDIC's Bank Find tool before opening an account.

Are CDs at credit unions covered the same way?

Credit unions are insured by the NCUA, not the FDIC, but the coverage is similar: up to $250,000 per depositor per credit union per account category. The protection works the same way, just through a different agency.

If I have $500,000, how do I protect all of it in CDs?

Open CDs at two different FDIC-insured banks: $250,000 at Bank A and $250,000 at Bank B. Each bank's CD is covered separately. Alternatively, use different ownership categories at one bank (individual, joint, trust) if that bank allows it, though this is more complex and most people find it easier to use multiple banks.

Does FDIC insurance cover the interest I earn on my CD?

Yes, interest accrued up to the date the bank fails is covered as part of the $250,000 limit. If you have a $240,000 CD that earns $15,000 in interest before the bank closes, the FDIC covers the full $255,000 because it is under the limit. If the total exceeds $250,000, only $250,000 is covered.