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FDIC Insurance: How It Works

In this article

  1. What is FDIC insurance?
  2. FDIC insurance limit
  3. Is Chime FDIC insured?
  4. What accounts are FDIC insured?
  5. Are any financial institutions not FDIC insured?
  6. FDIC insurance keeps your money safe
  7. FAQs

Worried about a bank failure? FDIC insurance ensures that your money is safe, up to certain limits.

A woman sits at a table with laptop open, reviewing paperwork.

Rebecca Lake • June 28, 2023

Watching your bank account balance grow is a great feeling when you’re working hard to save. FDIC insurance keeps your deposits safe, so you don’t have to worry about your hard-earned money.

The FDIC, meaning Federal Deposit Insurance Corporation, is responsible for insuring financial institutions so depositors don’t lose money in the unlikely event that a bank fails. While the risk of a bank failure is low, it’s still helpful to know that the FDIC has your back in case it happens.1

What is FDIC insurance?

FDIC insurance, also referred to as deposit insurance, is a type of insurance that applies to bank accounts. This type of insurance means that you—and other depositors—don’t lose all your money if your bank fails. And if you’re worried, remember that failures are rare at FDIC-insured banks.1

Should a bank fail, another bank can step in and take over its assets and debts. In that case, your accounts are transferred over to the new bank. Nothing would change except the name of your bank.2

When there’s no bank to take over, the FDIC steps in and does the following:

  • Pays insurance to depositors who had accounts at the bank up to the FDIC insurance limit.
  • Sells off the bank’s assets and settles its debts, including depositor claims that exceed the FDIC insurance limit.1

There’s nothing you need to do to get FDIC insurance. You’re already covered if you have accounts at an FDIC-member bank.

How can you tell if a bank is FDIC-insured? Banks are required to display FDIC signage at branches and online, identifying them as members. You can also use the FDIC’s BankFind Tool to check a bank’s status.3,4

Open a Chime Checking Account with no monthly fees to easily manage your money with 24/7 mobile banking.

FDIC insurance limit

FDIC coverage is not unlimited, and bank accounts are only protected up to certain amounts. The current FDIC coverage limit is $250,000 per account type, per depositor, per financial institution.5

The FDIC insurance limit applies to every financial institution where you maintain accounts. So, say you have $250,000 in a savings account at Bank A, $100,000 in a money market account at Bank B, and another $50,000 in a checking account at Bank C. Since all three accounts are separate, you’re fully insured up to the FDIC limit at all three banks.

What if you have joint accounts with someone else, like a spouse or significant other? You’d each have the same $250,000 coverage limit even though you own an account jointly. The entire amount would be covered if the account balance doesn’t exceed $500,000.5

What if you also have an individual account at the same bank that’s in your name only? That account would also be eligible for $250,000 in coverage because FDIC insurance applies to accounts per ownership type.

If trying to figure out how much coverage you have seems confusing, the FDIC has a deposit insurance calculator tool that can help.6

Is Chime FDIC insured?

Chime is a financial technology company, not a bank, but accounts you open through Chime are protected by FDIC insurance. Chime partners with The Bancorp Bank, N.A. and Stride Bank, N.A., both FDIC members. That means the deposits in your accounts through Chime are protected up to the FDIC coverage limit.

If you’re wondering whether FDIC insurance still applies if you manage your money online, versus at a traditional brick-and-mortar bank, the answer is yes. And what’s even more comforting – no covered depositor has lost a single cent since the FDIC was created in 1933.7

What accounts are FDIC insured?

The FDIC insures a variety of deposit accounts held at banks. The types of accounts that can be FDIC-insured include:

What about credit union accounts? The FDIC only insures banks, not credit unions. Instead, the National Credit Union Administration (NCUA) is responsible for insuring credit unions. Accounts are insured up to $250,000 per depositor.8

Are any financial institutions not FDIC insured?

Aside from credit unions, the FDIC doesn’t insure non-deposit investment products or institutions that provide them. For example, the FDIC doesn’t insure deposits if you have an investment account at an online brokerage. Insurance companies are not covered either. The list of things the FDIC doesn’t insure includes:

  • Stocks
  • Bond investments
  • Mutual funds
  • Cryptocurrency
  • Life insurance policies
  • Annuities
  • Municipal securities
  • Safe deposit boxes or their contents
  • U.S. Treasury bills, bonds, or notes5

Remember, the FDIC is just for banks and financial institutions. If you’re investing money, the FDIC doesn’t protect you against any potential losses if your investment doesn’t pan out. However, the Securities Investor Protection Corporation (SIPC) insures investors against the loss of cash or securities, up to $500,000, if their brokerage fails.9

FDIC insurance keeps your money safe

If you have a bank account, it’s a relief to know your money is protected. Even though bank failures are uncommon, it can be scary to hear about one on the news. FDIC insurance exists to give depositors like you peace of mind, so you don’t have to worry about your savings disappearing.

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FAQs

What does FDIC insurance cover?

FDIC insurance covers deposit accounts at FDIC-member banks. Deposits are protected against bank failure, up to $250,000 per depositor, per account ownership type, per financial institution.

What happens if you have more than $250k in the bank?

If your account balance exceeds the FDIC coverage limit, then it’s possible that some of your deposits would not be covered if the bank fails. You could file a claim for any uninsured deposit amounts, which the FDIC may pay if it becomes necessary to sell off the bank’s assets and settle its debts.

Does FDIC cover $500,000 on a joint account?

Yes. If you own a joint bank account with someone else, then each of you would be covered by FDIC insurance, up to $250,000. That effectively doubles the coverage limit for that account to $500,000.

How do I check my FDIC insurance?

You can use the FDIC’s deposit insurance estimator tool to enter information about your bank accounts and calculate what amount of your deposits, if any, are uninsured. If you have uninsured balances, you may want to talk to your bank about what you can do to fix it. That could include opening a new account elsewhere and transferring some of your uninsured balances.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

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Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

1 Information from the FDIC's "Deposit Insurance FAQs" as of June 13, 2023: https://www.fdic.gov/resources/deposit-insurance/faq/index.html

2 Information from the FDIC's "FDIC Knowledge Center" as of June 13, 2023: https://ask.fdic.gov/fdicinformationandsupportcenter/s/article/Q-What-happens-when-a-bank-fails?language=en_US

3 Information from the FDIC's "Request for Information on FDIC Sign and Advertising Requirements and Potential Technological Solutions" as of June 13, 2023: https://www.fdic.gov/news/press-releases/2020/pr20014a.pdf

4 Information from the FDIC's "BankFind Tool" as of June 13, 2023: https://banks.data.fdic.gov/bankfind-suite/bankfind

5 Information from the FDIC's "Deposit Insurance at a Glance" as of June 13, 2023: https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/

6 Information from the FDIC's "Deposit Insurance Estimator" as of June 13, 2023: https://edie.fdic.gov/calculator.html

7 Information from the FDIC's "When a Bank Fails - Facts for Depositors, Creditors, and Borrowers" as of June 13, 2023: https://www.fdic.gov/consumers/banking/facts/

8 Information from MyCreditUnion.gov's "Share Insurance Toolkit" as of June 13, 2023: https://mycreditunion.gov/share-insurance

9 Information from the SIPC's "What SIPC Protects" as of June 13, 2023: https://www.sipc.org/for-investors/what-sipc-protects

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