What is FDIC insurance?
If you’ve ever opened a bank account, you’ve probably seen the term FDIC insured. But what does that really mean—and how does it apply if you have multiple accounts at the same bank?
What Is FDIC Insurance?
FDIC insurance is a federal protection program provided by the Federal Deposit Insurance Corporation (FDIC). It was created in 1933 to restore trust in the banking system after the Great Depression. Today, it protects depositors in the event that an FDIC-insured bank fails.
The standard coverage limit is $250,000 per depositor, per insured bank, per ownership category. This means your money is safe up to that amount, but understanding how ownership categories work is key to maximizing your protection.
What Accounts Are Covered?
FDIC insurance covers most common deposit accounts, including:
- Checking accounts
- Savings accounts
- Money market deposit accounts (MMDAs)
- Certificates of deposit (CDs)
- Cashier’s checks and money orders issued by a bank
It does not cover investments like stocks, bonds, mutual funds, crypto assets, or the contents of safe deposit boxes.
How FDIC Insurance Applies Across Multiple Accounts
Here’s where things get interesting. If you have multiple accounts at the same bank, FDIC insurance doesn’t treat each account separately. Instead, it aggregates your balances by ownership category.
Example:
If you have more than one account at ZYNLO—say, a checking account, a savings account, and a CD—the FDIC combines your balances across those accounts if they’re in the same ownership category.
Example:
- Checking: $150,000
- Savings: $75,000
- CD: $50,000
Total: $275,000
In this case, $250,000 is insured, and $25,000 may be uninsured unless you structure your accounts differently.
Ownership Categories: A Way to Extend Coverage
FDIC insurance is calculated per ownership category, which means you can increase your coverage by diversifying how your accounts are owned. Common categories include:
- Individual accounts – $250,000 per person
- Joint accounts – $250,000 per co-owner (e.g., a couple could be insured up to $500,000)
- Retirement accounts (IRAs) – $250,000 per owner
- Revocable trust accounts – $250,000 per eligible beneficiary
So, if you have an individual account, a joint account with a spouse, and an IRA—all at the same bank—you could be insured for $750,000 or more, depending on how the accounts are structured.
How to Check Your Coverage
The FDIC offers a free tool called EDIE (Electronic Deposit Insurance Estimator) to help you calculate your coverage across accounts and ownership categories. You can find it on FDIC.gov.
Final Thoughts
FDIC insurance is one of the most important protections for your money. But to make the most of it, you need to understand how it works across different accounts and ownership types. If you’re managing large balances or multiple accounts, consider speaking with a licensed financial advisor or using the FDIC’s tools to ensure your deposits are fully protected.
That said, it’s best to talk to a licensed financial advisor to make sure your accounts are categorized in a way that protects you best. If a bank does not offer FDIC insurance, that’s a red flag—and you should reconsider banking with that institution.
