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

A certificate of deposit (CD) is a savings product where you deposit money for a fixed period — typically three months to five years — in exchange for a set interest rate. The Federal Deposit Insurance Corporation (FDIC) protects CDs the same way it protects regular savings accounts: if the bank fails, you get your money back, up to the insurance limit.

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. If you have two CDs totaling $300,000 at the same bank, only $250,000 is protected — the extra $50,000 is at risk if the bank closes.

This protection is automatic. You do not need to register or take any action. As long as your CD is held at an FDIC-member bank, the coverage is in place from the moment you open the account.

Key Takeaways

  • The FDIC covers CDs up to $250,000 per person per bank, the same limit that applies to savings and checking accounts.
  • Coverage is automatic — you do not need to do anything to activate it, and it applies whether your CD earns 0.5% or 5% interest.
  • If you have more than $250,000 to deposit, you can split it across multiple banks to keep all of it insured.
  • CDs at credit unions are covered by the NCUA (National Credit Union Administration) under the same $250,000 limit, not the FDIC.
  • The insurance covers the principal and accrued interest up to the $250,000 limit; if your CD earns $5,000 in interest, that counts toward your total coverage.

How the $250,000 limit works across multiple CDs

The FDIC counts all your deposits at one bank together. If you have a $150,000 CD and a $120,000 CD at the same bank, the FDIC sees $270,000 total — and only $250,000 is covered. The remaining $20,000 is uninsured.

Different ownership categories can change this. If you have a CD in your name alone and your spouse has a CD in their name alone at the same bank, each of you gets $250,000 of coverage. A joint CD (both names on the account) gets its own $250,000 limit. A CD held in trust for a beneficiary may also have separate coverage, depending on how it is structured.

The simplest way to protect large amounts is to use different banks. A $300,000 deposit split as $250,000 at Bank A and $50,000 at Bank B means all of it is covered. The FDIC website has a tool called the FDIC Coverage Calculator that shows exactly how much of your money is protected at any given bank.

What FDIC insurance actually covers

FDIC insurance covers the money you deposited plus any interest the CD has earned. If you put $100,000 into a three-year CD at 4% annual interest, and the bank fails after two years, you receive the $100,000 principal plus the $8,000 in accrued interest — all within the $250,000 limit.

The insurance does not cover losses from market changes or penalties for early withdrawal. If you withdraw money from a CD before it matures, the bank charges an early withdrawal penalty (typically three to six months of interest). That penalty is your loss, not the bank's failure, so the FDIC does not reimburse it. The insurance only protects you if the bank itself fails.

FDIC coverage also does not apply to CDs purchased through a brokerage. A brokerage-issued CD may still be FDIC insured if the underlying bank is FDIC-member, but the coverage rules are different and often more complex. If you buy a CD through a broker, ask them directly whether it is FDIC insured and what the limits are.

CDs at credit unions: NCUA insurance instead of FDIC

Credit unions do not use the FDIC. Instead, they are insured by the National Credit Union Administration (NCUA), a separate federal agency. NCUA coverage works the same way as FDIC coverage — $250,000 per member per credit union — but it is a different system.

If you have a CD at a credit union, check that the credit union is NCUA-insured. Most are, but a few private credit unions are not. The credit union should display the NCUA logo on its website or in its branch. You can also search the NCUA's database to confirm.

When FDIC insurance does not apply

FDIC insurance only covers deposits at banks that are FDIC members. Most banks in the United States are members, but not all. Before opening a CD, confirm that the bank displays the FDIC logo or check the FDIC's Bank Find tool on its website to verify membership.

Insurance also does not cover CDs issued by non-bank financial institutions — money market funds, brokerage firms, or investment companies. These products may offer higher interest rates than traditional CDs, but they carry different risks. The higher rate often reflects the fact that your money is not federally insured.

If a bank fails, the FDIC does not pay out immediately. The process typically takes a few days to a few weeks. During that time, your money is frozen. The FDIC then either arranges for another bank to take over your account or sends you a check for the insured amount. In practice, most account transfers happen within a business day or two.

How to verify FDIC coverage on your CD

The easiest way to check is to look for the FDIC logo on the bank's website or in the branch. You can also call the bank and ask directly whether your CD is FDIC insured.

For a detailed breakdown of your coverage at a specific bank, use the FDIC Coverage Calculator on the FDIC website. Enter the bank name, your ownership category (individual, joint, trust, etc.), and the amount in each account type. The tool shows exactly how much is covered and how much is not.

If you have more than $250,000 to invest in CDs, write down which banks you use and how much you have at each one. Keep this list updated. It takes only a few minutes and ensures you know whether all your money is protected.

Frequently Asked Questions

If I have $500,000, can I put $250,000 in a CD at two different banks and have it all covered?

Yes. Each bank provides its own $250,000 of FDIC coverage. You could also split it three ways — $250,000 at Bank A, $250,000 at Bank B, and $0 at Bank C — and all of it would be insured. The key is that each bank counts separately.

Does the interest rate on a CD affect whether it is FDIC insured?

No. A CD earning 0.5% and a CD earning 5% are both FDIC insured the same way, as long as they are at an FDIC-member bank. The interest rate does not change the insurance protection.

What happens to my CD if the bank fails?

The FDIC takes over and either transfers your CD to another bank or pays you the insured amount (up to $250,000 plus accrued interest). You keep the CD's interest rate and maturity date. The process usually takes a few days to a couple of weeks.

Are online bank CDs FDIC insured?

Yes, if the online bank is FDIC-member. Many online banks offer higher CD rates than traditional banks and are fully FDIC insured. Check the bank's website for the FDIC logo or use the Bank Find tool to confirm membership.

If I have a CD in my name and a joint CD with my spouse at the same bank, are both covered?

Yes. The FDIC counts them separately. Your individual CD gets $250,000 of coverage, and the joint CD gets its own $250,000 of coverage. Together, you could have up to $500,000 insured at that one bank.