Yes, most certificates of deposit are FDIC insured up to $250,000 per depositor, per bank, per account ownership category
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 will return your money up to the insurance limit. The standard limit is $250,000 per person, per bank. If you have $50,000 in a CD at Bank A and $50,000 in a CD at Bank B, both are fully covered because they are at different banks.
The key word is "FDIC-insured bank." Not every institution that sells CDs carries this protection. Banks chartered by the federal government or by states and members of the Federal Reserve System are FDIC-insured. Credit unions use a different system called NCUA insurance, which works the same way but is a separate program. If you buy a CD from an investment firm or brokerage that is not itself a bank, you need to check whether that firm holds the CD at an FDIC-insured bank on your behalf.
FDIC insurance is automatic. You do not need to sign up, pay a fee, or do anything special. It covers the full balance of your CD when the bank fails, including any interest that has accrued up to the date of failure.
Key Takeaways
- The FDIC insures CDs up to $250,000 per depositor per bank, so splitting money across multiple banks increases your total coverage.
- FDIC insurance only applies at banks that are members of the FDIC; credit unions use NCUA insurance instead, and brokerages may hold CDs at multiple banks to spread coverage.
- You are covered automatically with no paperwork or fees required, and the coverage includes interest earned on the CD.
- If you have a joint CD with another person, the $250,000 limit applies separately to each owner, doubling your coverage to $500,000 for that account.
How the $250,000 limit works across multiple CDs
The $250,000 FDIC insurance limit is per depositor, per bank, per account ownership category. This means the limit resets if you change any of those three things. If you have $100,000 in a CD at Bank A and $100,000 in a CD at Bank B, you are covered for the full $200,000 because the banks are different. If you have $300,000 in CDs at the same bank, only $250,000 is covered and you lose $50,000 if the bank fails.
Account ownership category matters. A CD in your name alone is insured separately from a CD you hold jointly with a spouse. A CD held in a revocable trust is insured separately from a CD in your individual name at the same bank. This structure lets you increase your total coverage by using different ownership categories. For example, you could have $250,000 in a CD in your name and $250,000 in a joint CD with your spouse at the same bank, and both would be fully covered.
The FDIC website has a tool called the FDIC Coverage Calculator where you can enter your accounts and see exactly how much is covered. This is useful if you have complex account structures or multiple banks.
What FDIC insurance does and does not cover
FDIC insurance covers the principal you deposited and any interest earned on the CD up to the date the bank fails. It does not cover losses from market risk, interest rate changes, or early withdrawal penalties. If you withdraw money from your CD before maturity, you pay the penalty out of your own pocket — the FDIC does not reimburse it.
FDIC insurance also does not cover CDs purchased through a brokerage unless the brokerage holds them at an FDIC-insured bank. Some brokerages buy CDs from multiple banks and hold them in your name, which spreads your coverage across those banks. Other brokerages hold all CDs at a single bank, which means your total coverage at that bank is still $250,000 even if you own ten different CDs through the brokerage. Before buying a brokered CD, ask the brokerage how it holds the CDs and whether they are at one bank or many.
CDs at credit unions and non-bank institutions
Credit unions do not use FDIC insurance. Instead, they use NCUA insurance (National Credit Union Administration), which provides the same $250,000 coverage per member per credit union per account ownership category. The rules are identical to FDIC insurance, just administered by a different agency. If you have a CD at a credit union, it is covered by NCUA, not the FDIC.
Some online platforms and fintech companies sell CDs but do not hold them directly. They partner with banks and hold the CDs on your behalf. These are still FDIC-insured as long as the underlying bank is FDIC-insured, but you should confirm this before opening an account. The platform should disclose which bank holds your CD and whether it is FDIC-insured.
Investment firms and stock brokerages that are not themselves banks do not carry FDIC insurance. If they sell CDs, those CDs are held at a bank and insured by the FDIC, but the brokerage itself is not insured. This distinction matters if the brokerage fails — your CD is still safe because it is at the bank, but any cash or securities held at the brokerage may not be protected.
How to verify your bank is FDIC-insured
You can search the FDIC's Bank Find tool on the FDIC website to confirm whether a specific bank is insured. Enter the bank name and state, and the tool will show you its FDIC certificate number and the date it joined the system. If the bank does not appear in the search, it is not FDIC-insured.
Most large national banks and regional banks are FDIC-insured. Some very small banks, online banks, and foreign banks operating in the United States may not be. Before opening a CD, especially at a bank you have not heard of, run a quick search. It takes 30 seconds and confirms your money is protected.
What happens if your bank fails
If an FDIC-insured bank fails, the FDIC steps in and pays depositors up to the insurance limit. You do not have to do anything — the FDIC contacts you automatically. Historically, the FDIC has paid depositors within a few days of a bank closure, though the exact timeline depends on the complexity of the bank's records.
You receive payment for the full balance of your CD, including accrued interest, up to $250,000 per account category. If your CD was worth more than $250,000, you lose the amount over the limit. This is rare for individual depositors but can happen if you have a very large CD at a single bank without using joint ownership or trust structures to increase coverage.
Frequently Asked Questions
If I have multiple CDs at the same bank, does each one get $250,000 of coverage?
No. All CDs you own in your name at the same bank share a single $250,000 limit. If you have a $150,000 CD and a $150,000 CD at the same bank, only $250,000 total is covered. To cover both fully, you would need to split them across two different banks or use a different account ownership category, such as a joint account or trust.
Are CDs bought through my brokerage covered by FDIC insurance?
It depends on how the brokerage holds them. If the brokerage buys CDs from FDIC-insured banks and holds them in your name at those banks, they are covered. If the brokerage holds all CDs at a single bank, your total coverage is $250,000 across all of them. Ask your brokerage which bank holds your CD and whether it spreads CDs across multiple banks to increase coverage.
Does FDIC insurance cover the penalty if I withdraw early?
No. Early withdrawal penalties are your responsibility. If you withdraw $50,000 from a $50,000 CD early and pay a $500 penalty, the FDIC does not reimburse the penalty. FDIC insurance covers only the principal and accrued interest if the bank fails.
Are CDs at online banks FDIC-insured?
Most online banks are FDIC-insured, but not all. Search the FDIC Bank Find tool with the online bank's name to confirm. Many online banks are subsidiaries of larger FDIC-insured banks, so your CD is covered even though you opened it online.
If I have a CD in a revocable trust, does it get separate coverage from a CD in my name?
Yes. A CD held in a revocable trust is a separate account ownership category and gets its own $250,000 limit at the same bank. This allows you to have $250,000 in an individual CD and $250,000 in a trust CD at the same bank, both fully covered.