Yes, money market accounts at banks are FDIC insured up to $250,000 per depositor, per bank

The Federal Deposit Insurance Corporation (FDIC) insures money market accounts held at FDIC-member banks. The standard coverage limit is $250,000 per depositor, per institution. This means if your bank fails, the FDIC will reimburse you up to that amount.

The catch: this protection only applies to money market accounts at banks. Money market funds sold by investment firms, brokerage houses, and mutual fund companies are not FDIC insured. They are securities, not deposits, and are regulated differently. Before opening a money market account, confirm that the institution is an FDIC member — most traditional banks are, but some online banks and credit unions are not.

Credit unions offer a similar but separate insurance program called NCUA insurance (National Credit Union Administration), which also covers up to $250,000 per member per credit union. The rules are the same; the insurer is different.

Key Takeaways

  • Money market accounts at FDIC-member banks are insured up to $250,000 per depositor per bank, the same as savings accounts.
  • Money market funds sold by investment firms and brokerages are not FDIC insured because they are securities, not bank deposits.
  • If you have more than $250,000, you can spread it across multiple banks to keep all of it insured.
  • Credit unions use NCUA insurance instead of FDIC, but the coverage limit and rules are identical.
  • Confirm your bank is FDIC-member before depositing; you can check the FDIC's BankFind tool online.

How the $250,000 limit works across multiple accounts

The $250,000 limit applies per depositor, per bank — not per account. If you have a money market account and a savings account at the same FDIC-member bank, both are covered under the same $250,000 umbrella. If you have $150,000 in the money market account and $120,000 in savings at that bank, only $250,000 total is insured; the remaining $20,000 is not.

To protect more than $250,000, open accounts at different FDIC-member banks. Each bank's $250,000 limit is separate. You could have $250,000 at Bank A and $250,000 at Bank B, and both amounts would be fully insured. The FDIC tracks this by your Social Security number and the bank's routing number, so the bank name alone does not matter — what matters is whether it is a separate institution.

Some large banks own multiple subsidiary banks with different routing numbers. If you are unsure whether two accounts are at the same institution or separate ones, use the FDIC's BankFind tool on their website. Search by bank name and routing number to see how your deposits are grouped for insurance purposes.

The difference between FDIC-insured accounts and money market funds

A money market account at a bank is a deposit product. You own the money; the bank holds it. The FDIC insures it. Interest rates vary by bank and change over time, but your principal is protected.

A money market fund is a mutual fund that invests in short-term debt securities — Treasury bills, commercial paper, and similar instruments. You own shares of the fund, not the underlying securities directly. The fund's value can fluctuate slightly, and it is not FDIC insured. Instead, it is regulated by the Securities and Exchange Commission (SEC) and held by a custodian. If the fund company fails, your shares are still yours; if the fund itself loses value, you lose money.

Money market funds often advertise higher yields than money market accounts because they carry more risk and are not insured. If yield is your main concern, compare the actual rate offered by a money market account to the current yield of a money market fund, then decide whether the extra percentage points are worth giving up FDIC protection.

What FDIC insurance does and does not cover

FDIC insurance covers the balance in your account if the bank fails. It does not cover losses from fraud, theft, or your own mistakes — such as sending money to the wrong person or falling for a scam. It also does not cover investment losses if your bank offers brokerage services and you buy stocks or bonds through them.

The insurance is automatic. You do not need to register, pay a fee, or do anything to activate it. As long as your account is at an FDIC-member bank and your balance is under $250,000, you are covered. The FDIC does not require you to prove you own the account; they use bank records.

If a bank fails, the FDIC typically transfers your account to another bank within a few business days. You keep your money and your account number usually changes, but your balance remains the same. In rare cases where a transfer is not possible, the FDIC sends you a check.

Special FDIC coverage categories for higher balances

The standard $250,000 limit applies to accounts in your name alone. The FDIC also recognizes other ownership categories, each with its own $250,000 limit. If you have a joint account with your spouse, that account is insured separately from your individual account — so you could have $250,000 in your name and another $250,000 in a joint account at the same bank, and both would be fully covered.

Other categories include retirement accounts (such as IRAs), trust accounts, and accounts held for a minor. Each category has its own $250,000 limit. A money market account held as an IRA is insured separately from a money market account held in your name. This structure allows families and business owners to protect more than $250,000 at a single bank.

The rules for these categories are specific. For example, a joint account must be held in the names of two people with equal rights; a trust account must be set up correctly with named beneficiaries. If you are considering using these categories to protect a large balance, review the FDIC's coverage rules or ask your bank to confirm how your account will be insured.

How to verify your bank is FDIC-insured

Before opening a money market account, confirm that the bank is an FDIC member. Most banks are, but some online banks, credit unions, and alternative financial institutions are not. The easiest way to check is the FDIC's BankFind tool, available on the FDIC website. Enter the bank name and state, and the tool will show you whether it is insured, its routing number, and how many branches it has.

You can also ask the bank directly. FDIC-member banks are required to display the FDIC logo and insurance information in their lobby and on their website. If a bank does not mention FDIC insurance or cannot tell you its routing number, that is a red flag.

If your bank is not FDIC-insured but is a credit union, check whether it is NCUA-insured instead. NCUA insurance works the same way as FDIC insurance — $250,000 per member per credit union — and is equally reliable. If an institution is neither FDIC nor NCUA-insured, your deposits are not protected by federal insurance.

Frequently Asked Questions

If I have $300,000, how do I keep all of it insured?

Open money market accounts at two different FDIC-member banks. Put $250,000 at Bank A and $50,000 at Bank B. Both amounts are fully insured because each bank's coverage is separate. You can use the FDIC's BankFind tool to find banks in your area.

Is a money market account the same as a money market fund?

No. A money market account is a bank deposit and is FDIC insured. A money market fund is a mutual fund investment and is not FDIC insured. Money market funds often offer higher yields but carry more risk. Check which product your bank is offering before you open it.

What happens to my money market account if the bank fails?

The FDIC will transfer your account to another bank within a few business days, or send you a check if a transfer is not possible. Your balance up to $250,000 is fully protected. You will not lose money, but your account number and bank may change.

Does FDIC insurance cover money I lost to fraud or a scam?

No. FDIC insurance only covers losses from bank failure, not fraud or theft. If someone steals your login information or you send money to a scammer, that is not covered. Report fraud to your bank and the Federal Trade Commission immediately.

Are online banks FDIC insured?

Most online banks are FDIC-member institutions and offer the same $250,000 coverage as traditional banks. However, not all are. Use the FDIC's BankFind tool to verify the bank's FDIC status before opening an account. Search by the bank's name and the state where it is chartered.