Due to the recent collapse of Silicon Valley Bank and Signature Bank, many people are concerned if the funds in their bank accounts are safe. If you have a couple of hundred dollars in your bank account then you don’t need to worry. But what if you have a couple of hundred thousand or a couple of million dollars in your bank account? In this post, we will answer many of the questions readers have asked us in the last few days about FDIC insurance.

What's the FDIC?

Let’s first start with the basics. What is the FDIC?

The FDIC (Federal Deposit Insurance Corporation) was created in 1933 to protect bank deposits from failure. The current standard deposit insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.


FDIC insurance covers various types of deposit accounts, including checking, savings, money market accounts, and certificates of deposit (CDs). FDIC insurance does not cover securities, mutual funds, annuities, or other types of investments, nor does it protect against losses due to fraud or illegal activities.

If I have multiple accounts in the same bank do each of them have their own insurance limit of $250,000?

Each account will only have its own insurance if they are in different ownership categories. For example, if you have a personal and a joint account. Having separate checking and savings accounts are not enough.

The FDIC considers the following account types to be separate ownership categories.

–  Single Accounts
– Certain Retirement Accounts
– Joint Accounts
-Revocable Trust Accounts
– Irrevocable Trust Accounts
– Employee Benefit Plan Accounts
– Corporation/Partnership/Unincorporated Association Accounts
– Government Accounts

I have multiple accounts of the same types in the same bank that I opened in different branches. Do they each have their own coverage?

No. Accounts of the same type must be open in separate banks (not branches) to have their own coverage limits.

If I have multiple accounts of the same ownership type but in different banks does each account have its own limit?

Yes.

I have multiple LLC’s which have accounts in the same bank do they each have their own coverage?

Yes. LLCs are considered their own entities so different LLCs are not combined for coverage limits.

I have personal checking account and an account I use for my sole proprietorship are they considered separate ownership categories?

No. To be considered a separate ownership category the account must belong to a registered business entity such as an LLC.

Can I open an LLC for the sole purpose of having another insurance covered account?

No. The FDIC does not cover accounts which their sole operating purpose is to extend insurance coverage. However, if you already have an existing business account you may transfer money to it for insurance purposes.

Our LLC has multiple members what is our coverage limit?

$250,000.

We have multiple accounts for our LLC in the same bank does each account have its own coverage.

No

What is the coverage of a joint checking or savings account?

$250,000 per eligible account holder. So $500k total 

If my spouse and I both have personal accounts and we also share a joint account in the same bank what is the coverage in each account?

Since the joint account is considered by the FDIC as a separate ownership category you’ll each have $250,000 of coverage in your personal accounts and a combined $500,000 in the joint account.

Are there any banks that have FDIC insurance for more then $250,000?

Yes. The way this is done is through something called IntraFi which is a network of banks that share their deposits, so no more than $250,000 is kept in a single institution. This avoids any limits on coverage. This is the same as having multiple accounts in different banks but simplifies it for you, as you only have to deal directly with one bank. You can see a full list of banks that use an IntraFi network here.