Deposit insurance is a promise by a public institution to make retail depositors whole if their bank fails. In the United States, that institution is the FDIC and the limit is $250,000 per depositor per bank per ownership category. Understanding how the coverage is counted is a working skill.
- 01State the FDIC limit and the four coverage categories a household typically uses.
- 02Combine coverage across banks and account types to insure a larger balance.
- 03Distinguish deposit insurance from SIPC protection at a brokerage.
The limit
$250,000 per depositor, per insured bank, per ownership category. A single account, a joint account, a revocable-trust account, and a certain retirement account are separate categories at the same bank, which is how a household can insure more than $250,000 at one institution.
Across banks
Separate insured banks provide separate coverage limits. Two banks under the same holding company are usually separate insured entities for FDIC purposes; check the certificate number, not the brand.
SIPC is not FDIC
Brokerage accounts are protected by SIPC, which insures the return of securities and up to $250,000 in cash if the broker fails — a protection against custodial failure, not market loss. Learn the difference before you need it.
- $250,000 per depositor, per bank, per ownership category.
- Separate banks and separate categories multiply coverage.
- SIPC protects against broker failure, not market movement.