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

Your money in a certificate of deposit (CD) is protected by the Federal Deposit Insurance Corporation (FDIC), a government agency that guarantees deposits at member banks. If the bank fails, the FDIC will pay you back up to $250,000 of your CD balance. This protection applies whether your CD earns 0.5% or 5% — the insurance amount does not change based on the interest rate.

The $250,000 limit is per depositor, per bank. This means 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. But if you have two CDs totaling $300,000 at the same bank, only $250,000 is insured. The FDIC counts all your deposits at one bank together — savings accounts, checking accounts, money market accounts, and CDs all add up toward that single $250,000 limit.

Key Takeaways

  • The FDIC insures CDs up to $250,000 per person, per bank, regardless of the interest rate or CD term.
  • If you have multiple CDs at the same bank, their balances combine toward the $250,000 limit, not separately.
  • Only banks that are FDIC members are covered — most traditional banks are, but you should verify before opening a CD.
  • The FDIC protection is automatic and costs you nothing; you do not need to register or take any action.
  • If your CD balance exceeds $250,000 at one bank, the amount over the limit has no insurance protection.

How to verify your bank is FDIC insured

Not every institution that takes deposits is FDIC insured. Online banks, credit unions, and some fintech companies may not be members. Before you open a CD, check the FDIC's official bank search tool at banks.fdic.gov. Type in the bank's name and your state. If it appears in the results with a green checkmark, it is FDIC insured.

You can also look for the FDIC logo on the bank's website or ask a customer service representative directly. The bank is required by law to disclose whether it is FDIC insured. If a bank is not FDIC insured, your CD is not protected if the bank fails — your money could be lost entirely.

What happens to your CD if the bank fails

If your bank closes, the FDIC takes over and pays out insured deposits. You do not lose access to your money. The FDIC typically deposits the insured amount into an account at another bank within a few business days, or it may mail you a check. You will receive up to $250,000 of your CD balance automatically.

If your CD balance is above $250,000, the FDIC will pay the first $250,000. The remaining balance becomes a claim against the failed bank's assets. In most cases, you recover little or nothing of the uninsured portion. This is rare — bank failures are uncommon, and the FDIC has paid out insured deposits in full since its creation in 1933.

How the $250,000 limit works across multiple accounts

The FDIC counts all your deposits at one bank as a single total for insurance purposes. If you have a savings account with $100,000, a checking account with $75,000, and a CD with $100,000 at the same bank, the FDIC sees $275,000 total. Only $250,000 is insured; the remaining $25,000 has no protection.

To protect more than $250,000 at one bank, you can use separate account ownership categories. For example, a CD in your name alone and a CD in your spouse's name alone are each insured up to $250,000. A CD held in a trust may have separate coverage. A CD in a business name may also be counted separately from your personal CDs. The FDIC website has a coverage calculator that shows you exactly how much is insured under different ownership structures.

FDIC insurance does not cover investment risk

FDIC insurance protects you if the bank fails. It does not protect you if you change your mind about the CD before it matures. If you withdraw money early from a CD, you typically pay an early withdrawal penalty — usually a few months of interest. The FDIC does not reimburse this penalty.

Similarly, FDIC insurance does not protect you against inflation or low interest rates. If you lock $10,000 into a CD earning 1% and inflation rises to 3%, your money loses purchasing power. The FDIC guarantees the bank will not fail and you will get your principal back — but it does not may provide your money will grow faster than prices.

Credit unions and FDIC coverage

Credit unions are not FDIC insured. Instead, they are insured by the National Credit Union Administration (NCUA), a separate government agency. NCUA coverage works the same way as FDIC coverage — up to $250,000 per member, per credit union. If you have a CD at a credit union, check the NCUA's website to confirm coverage, just as you would with an FDIC bank.

Some people use both FDIC and NCUA institutions to protect more than $250,000. For example, you could put $250,000 in a CD at an FDIC bank and $250,000 in a CD at a credit union, and both amounts would be fully insured. The two systems do not overlap — a bank and a credit union are separate institutions for insurance purposes.

Frequently Asked Questions

If I have $300,000 and want to open CDs, how do I protect all of it?

Open a $250,000 CD at one FDIC bank and a $50,000 CD at a different FDIC bank. Each bank's deposit is insured separately. You could also split the money across a bank and a credit union, or use joint ownership or trust accounts at the same bank — the FDIC coverage calculator shows you all the options.

Does FDIC insurance cover CDs at online banks?

Yes, if the online bank is FDIC insured. Most online banks are FDIC members, but not all. Check the bank's website for the FDIC logo or search banks.fdic.gov. Online banks often offer higher CD rates than brick-and-mortar banks, and the FDIC protection is identical.

What if my CD is in a different person's name — am I still covered?

No. FDIC insurance is tied to the depositor's name and Social Security number. A CD in your spouse's name is insured separately from a CD in your name, each up to $250,000. A CD in your child's name is also separate. This is one way to protect more than $250,000 at one bank.

Does the FDIC cover the interest my CD earns?

Yes. The FDIC insures the principal plus any accrued interest up to the $250,000 limit. If you have a $240,000 CD that earns $8,000 in interest before maturity, the full $248,000 is insured. The interest counts toward your $250,000 limit at that bank.

Can I lose FDIC coverage if I do not do something?

No. FDIC coverage is automatic. You do not need to register, sign up, or take any action. As long as your bank is FDIC insured and your balance is under $250,000 per bank, you are covered from the moment you open the CD.