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

A certificate of deposit (CD) held at an FDIC-insured bank is protected by federal deposit insurance. This means if the bank fails, the FDIC — the Federal Deposit Insurance Corporation — will return your money up to $250,000. The insurance covers the principal you deposited plus any interest earned up to the moment the bank closes.

The key word is "per bank." If you have $250,000 in a CD at Bank A and $250,000 in a CD at Bank B, both are fully insured. But if you have $300,000 in CDs at the same bank, only $250,000 is covered. The extra $50,000 sits outside the insurance limit.

This protection is automatic. You do not need to sign up for it, pay for it, or do anything special. As long as your bank is FDIC-insured — which nearly all banks are — your CD is covered from the day you open it.

Key Takeaways

  • The FDIC insures CDs up to $250,000 per depositor per bank, covering both your principal and accrued interest.
  • Insurance is automatic and costs you nothing; you do not need to register or take any action to be covered.
  • Online banks, credit unions, and brokerage firms may have different insurance rules, so you must check before opening a CD with them.
  • If you have more than $250,000 to deposit, you can spread it across multiple banks or use special account types to increase your coverage.

Which banks and institutions are FDIC insured

Nearly all traditional banks — whether large national chains or small local institutions — carry FDIC insurance. You can search the FDIC's official bank database on their website to confirm a specific bank is insured before you open a CD there.

Credit unions are not FDIC-insured. Instead, they are insured by the NCUA (National Credit Union Administration), which offers the same $250,000 per depositor limit. If you open a CD at a credit union, you are covered under NCUA rules, not FDIC rules, but the protection is equivalent.

Online banks are FDIC-insured if they are chartered as banks and belong to the FDIC system. Most major online banks (like Ally, Marcus, or Discover) are FDIC-insured, but you should verify this on their website or by calling before you deposit money.

Brokerage firms that sell CDs do not themselves hold FDIC insurance. However, they often partner with multiple FDIC-insured banks behind the scenes. When you buy a CD through a brokerage, the brokerage places your money at one or more of these partner banks, and the FDIC insurance follows the money to the bank. This is called a "brokered CD."

How the $250,000 limit works with multiple CDs

The $250,000 limit applies to your total deposits at one bank, not per CD. If you have three CDs at the same bank worth $100,000 each, your total coverage is $250,000, not $750,000. The FDIC adds up all your deposits at that institution and insures the combined total up to the limit.

This includes not just CDs but also savings accounts, checking accounts, and money market accounts at the same bank. If you have a $150,000 savings account and a $150,000 CD at the same bank, only $250,000 of the combined $300,000 is insured.

To protect more than $250,000, you have two main options. First, you can spread your money across different banks — each bank's $250,000 limit is separate. Second, you can use special account categories that the FDIC recognizes, such as joint accounts or retirement accounts, each of which has its own $250,000 limit at the same bank.

Special account types that increase your coverage

The FDIC recognizes several account categories, and each one gets its own $250,000 limit at the same bank. This means you can have more than $250,000 insured at one institution if you use different account types.

A joint account (held in two or more names) is insured separately from an individual account. If you have a $250,000 individual CD and a $250,000 joint CD with your spouse at the same bank, both are fully covered — $500,000 total.

A retirement account (such as a traditional IRA or Roth IRA) is insured separately from a non-retirement account. You can have a $250,000 CD in your individual name and a $250,000 CD in your IRA at the same bank, and both are fully insured.

A trust account is also insured separately, though the rules are more complex. The FDIC insures trust accounts based on the number of unique beneficiaries named in the trust, with each beneficiary receiving up to $250,000 in coverage.

What happens if a bank fails

Bank failures are rare in the United States, but they do occur. When an FDIC-insured bank closes, the FDIC steps in as the insurer. The agency typically transfers your CD (and any other deposits) to another FDIC-insured bank, and you continue to earn interest at the same rate until your CD matures. You may not even notice the transfer.

If the FDIC cannot find another bank to take over your account, the FDIC pays you directly. This process usually takes a few weeks. You receive a check or electronic transfer for the full amount of your insured deposits — up to $250,000 — plus any accrued interest.

If your CD balance exceeds $250,000, you lose the amount over the limit. This is why it matters to understand the coverage rules before you deposit large sums.

CDs at brokerage firms and special situations

When you buy a CD through a brokerage like Fidelity, Charles Schwab, or Vanguard, the brokerage does not hold your money directly. Instead, it places your CD at one or more FDIC-insured banks. The FDIC insurance still applies, but the rules can be different.

Many brokerages use a network of partner banks to spread your deposits across multiple institutions, each within the $250,000 limit. This means a brokerage can hold a $500,000 CD for you and keep it fully insured by placing $250,000 at Bank A and $250,000 at Bank B. The brokerage handles this behind the scenes.

However, you should ask the brokerage how it structures your CD before you buy. Some brokerages may place your entire CD at a single bank, which would limit your coverage to $250,000. Others may charge a fee or offer lower interest rates. Understanding the structure helps you make an informed decision.

CDs that are not FDIC insured

Most CDs sold by banks are FDIC-insured, but some are not. Brokered CDs issued by non-bank institutions, CDs from credit unions (which use NCUA insurance instead), and CDs from investment firms that are not banks fall outside FDIC coverage.

Additionally, if you buy a CD from a bank that is not FDIC-insured — which is rare but possible — you have no federal insurance protection. Before you open a CD anywhere, confirm that the institution is FDIC-insured or NCUA-insured by checking the official databases or asking directly.

Frequently Asked Questions

Is my CD insured if the bank is FDIC-insured but I opened it online?

Yes, as long as the bank itself is FDIC-insured, your CD is covered regardless of whether you opened it in person or online. The insurance applies to the bank, not the method you used to open the account. Verify the bank's FDIC status on the FDIC website before you deposit.

What if I have $300,000 and want to put it all in CDs?

You can open a $250,000 CD at Bank A and a $50,000 CD at Bank B, and both will be fully insured. Alternatively, you could open a $250,000 individual CD and a $50,000 joint CD with a spouse at the same bank, using two separate account categories. The key is to stay within the $250,000 limit per category per bank.

Do I lose money if the bank fails and my CD is over $250,000?

Yes. If your CD balance is $300,000 and the bank fails, the FDIC covers only $250,000. The remaining $50,000 is not insured and may be lost. This is why spreading large deposits across multiple banks or using different account types matters.

Are CDs at online banks as safe as CDs at traditional banks?

If the online bank is FDIC-insured, your CD has the same federal protection as a CD at a brick-and-mortar bank. The FDIC insurance does not depend on whether the bank has physical locations. Always confirm FDIC status before opening an account.

What if I buy a CD through my brokerage — is it still FDIC insured?

Usually yes, because the brokerage places your money at FDIC-insured banks. However, the structure varies by brokerage. Some spread your deposit across multiple banks to maximize coverage; others place it at a single bank. Ask your brokerage how it handles your CD before you buy.