CDs are insured up to $250,000 per depositor per bank, through the FDIC

Yes — Certificates of Deposit (CDs) held at FDIC-insured banks are protected by federal deposit insurance. The Federal Deposit Insurance Corporation covers up to $250,000 per depositor, per institution, per ownership category. This means if your bank fails, the FDIC will return your money up to that limit, including any interest earned up to the date of failure.

The $250,000 limit applies to the total of all your CDs at a single bank combined. If you have a $150,000 CD and a $120,000 CD at the same bank, you are covered for $250,000 total — not $250,000 per CD. The coverage is automatic; you do not need to register or take any action to receive it.

Not all financial institutions offer FDIC insurance. Banks and savings associations are covered. Credit unions are covered under a similar program called the National Credit Union Administration (NCUA), which also protects up to $250,000 per member per institution. Brokerage firms, money market funds, and investment companies do not carry FDIC protection, even if they sell CDs.

Key Takeaways

  • The FDIC insures CDs up to $250,000 per depositor per bank, and this coverage is automatic at any FDIC-insured institution.
  • The $250,000 limit covers all your CDs at one bank combined, not per individual CD.
  • You can increase your coverage by opening CDs at different FDIC-insured banks, since each institution's limit is separate.
  • Credit unions offer the same $250,000 protection through the NCUA, but brokerage-sold CDs and non-bank institutions do not carry federal insurance.

How to verify your bank is FDIC-insured

Before you open a CD, confirm the institution is FDIC-insured. The FDIC maintains a searchable database called BankFind at banks.data.fdic.gov. Enter the bank's name and state; if it appears in the results with an active status, it is covered.

You can also look for the FDIC logo on the bank's website or ask a representative directly. Banks are required by law to display FDIC insurance information in their lobbies and on deposit account disclosures. If a bank cannot confirm FDIC coverage, do not open an account there.

What happens if you have more than $250,000 to save

If you want to save more than $250,000 and keep it all insured, open CDs at different FDIC-insured banks. Each bank's $250,000 limit is separate. You could hold a $250,000 CD at Bank A and a $250,000 CD at Bank B, and both would be fully covered.

Some people use a strategy called "CD laddering" across multiple banks to maximize both insurance coverage and access to their money. For example, you might open five $50,000 CDs at five different banks, each with a different maturity date. When the first one matures, you have access to cash; when the second matures, you can roll it into a new CD at a different bank if rates have changed.

Online banks and regional banks are separate institutions for FDIC purposes, even if they are owned by the same parent company. Verify each one individually in the BankFind database to be certain.

Joint accounts and other ownership categories get separate coverage

The FDIC counts coverage by ownership category, not just by person. A CD held in your name alone is insured separately from a CD held jointly with your spouse. If you have a $250,000 individual CD and a $250,000 joint CD at the same bank, both are covered in full.

Other categories that receive separate $250,000 limits include retirement accounts (IRAs, SEP-IRAs, and similar plans), accounts held in trust, and accounts held for a business. Each category is insured independently at the same institution. This structure allows families and business owners to protect larger amounts at a single bank without opening accounts at multiple institutions.

The FDIC's official website has a tool called the FDIC Coverage Calculator where you can enter your account structure and see exactly how much coverage you have. This is useful if you hold CDs in multiple categories or are unsure how your accounts are titled.

CDs sold through brokers may not be FDIC-insured

Brokerage firms often sell CDs issued by banks, but the insurance coverage depends on how the CD is held. If a brokerage holds the CD in its own name as custodian, the FDIC may not cover it. If the brokerage is part of an FDIC-insured bank or holds the CD in a way that preserves your direct relationship with the bank, coverage may apply.

Before buying a CD through a broker, ask in writing whether the CD is FDIC-insured and request the name of the issuing bank. Then verify that bank in the BankFind database. Do not assume a brokerage CD is covered just because the issuing bank is FDIC-insured — the structure of the account matters.

Brokered CDs also sometimes carry different terms than bank CDs: they may have early withdrawal penalties, may not be callable by the bank, or may trade on a secondary market. These features are separate from insurance coverage but affect how liquid your money actually is.

FDIC insurance does not cover investment losses or rate risk

FDIC insurance protects your principal and accrued interest if the bank fails. It does not protect you if you lock in a low rate and rates rise, or if you need your money before the CD matures and face an early withdrawal penalty. Those are financial risks you bear, not bank failure risks.

If you withdraw money from a CD before maturity, the bank will charge a penalty — often three to six months of interest, depending on the term. The FDIC does not reimburse this penalty. Similarly, if you buy a CD at 4% and rates jump to 5%, you cannot force the bank to give you the higher rate. Insurance covers only the scenario where the bank itself becomes insolvent.

What to do if your bank fails

If an FDIC-insured bank fails, the FDIC steps in as receiver. You will receive written notice of the failure and instructions on how to claim your insured deposits. In most cases, the FDIC arranges for another bank to assume your accounts, and you retain access to your money without interruption.

If no bank assumes your account, the FDIC will mail you a check for your insured balance within a few business days. The process is automatic — you do not need to file a claim or provide proof of deposit. Keep your CD statements and account records in case you need to document your balance, but the FDIC has its own records.

Bank failures are rare in the United States. The FDIC has been in operation since 1933, and the vast majority of banks remain solvent. FDIC insurance exists as a safety net, not as a common occurrence.

Frequently Asked Questions

If I have $300,000, can I split it between two CDs at the same bank and be fully covered?

No. The $250,000 limit covers all your deposits at one bank combined, regardless of how many CDs you own there. To cover $300,000, you would need to open a $250,000 CD at one FDIC-insured bank and a $50,000 CD at a different FDIC-insured bank.

Are CDs at online banks insured the same way as CDs at brick-and-mortar banks?

Yes, as long as the online bank is FDIC-insured. Online banks and traditional banks have the same $250,000 coverage limit per depositor per institution. Verify the online bank in the BankFind database before opening an account.

What if I have a CD in my name and another CD in a trust at the same bank?

Both are covered. The FDIC treats individual accounts and trust accounts as separate ownership categories, so you would have $250,000 coverage for each. The same applies to joint accounts, retirement accounts, and business accounts.

Does FDIC insurance cover my CD if the bank is bought by another bank?

Yes. A bank acquisition does not affect FDIC coverage. Your CD remains insured at the new bank, and the $250,000 limit resets based on your relationship with the acquiring institution. If you held a $250,000 CD at Bank A and it is acquired by Bank B, you now have a separate $250,000 limit at Bank B.

Can I lose my CD money if the stock market crashes?

No. CDs are not affected by stock market performance. FDIC insurance protects against bank failure, not market downturns. Your principal and interest are safe regardless of what happens in the broader economy, as long as the bank remains solvent.