Glossary · Money and central banks

Deposit insurance

Deposit insurance is a government-backed guarantee that you get your bank deposits back, up to a limit, if the bank fails: $250,000 in the US as of 2026.

Also called: FDIC insurance, FDIC, deposit guarantee, insured deposits

In plain words

If your bank went bust tomorrow, would your savings vanish? In the US almost certainly not: deposits up to $250,000 are guaranteed by the Federal Deposit Insurance Corporation, the FDIC. That promise is deposit insurance.

It works like insurance anywhere else. Banks pay premiums into a fund; when a bank fails, the fund pays its depositors, usually within a business day or two, often by moving the accounts to a healthy bank so that customers barely notice. Behind the fund stands the government.

Its real job is to stop bank runs before they start. If your money is safe whatever happens, there is no reason to rush to the bank at the first rumor, so a scare at one bank does not become a panic.

The US limit applies per depositor, per insured bank, per ownership category, so one person can have more than $250,000 insured at one bank.

Example

How far $250,000 goes at one bank

Ana keeps $300,000 in a savings account in her name alone: $250,000 is insured, $50,000 is not.
She moves $100,000 into a joint account with her husband. Her own account now holds $200,000, fully insured; the joint account is insured up to $250,000 per co-owner, $500,000 in all.
Her $200,000 in an IRA at the same bank is a separate category, with its own $250,000 limit.
Or she could keep $150,000 at each of two different banks: each is insured separately.

The limit is per depositor, per insured bank, per ownership category, not per account.

One level deeper

The US created the FDIC in 1933, after thousands of bank failures in the Depression, and insurance began on January 1, 1934, at $2,500 per depositor. The limit was raised over the years; it went to $250,000 in October 2008, in the financial crisis, and was made permanent in 2010. Since the FDIC opened, no depositor has lost a cent of insured money.

Other countries have their own schemes: in the European Union every country must guarantee €100,000 per depositor per bank. US credit unions are covered by a similar fund run by the NCUA. Stocks, bonds, mutual funds and crypto are not deposits and are not covered, even when bought at a bank; brokerage accounts have a different protection, SIPC, which covers missing assets if a broker fails, not market losses.

The catch economists point to is moral hazard: depositors who know they are safe stop checking whether their bank takes reckless risks, so banks can take more. Premiums that rise with a bank’s risk, capital rules and supervision are meant to offset it. In March 2023 the US government went beyond the limit and covered all deposits at Silicon Valley Bank and Signature Bank, which revived the debate about how far protection should go.

Why it matters

It is the main reason bank runs by ordinary savers are rare today.

The limit matters for anyone with large sums at one bank: money above it can be lost if the bank fails.

It shapes banking: insured deposits are a cheap, steady source of money for banks, which is why they compete for them.

A common mistake

Myth: The FDIC insures everything you hold at a bank, investments included.

In fact: It insures deposits only: checking and savings accounts, certificates of deposit and money market deposit accounts, up to the limit. Stocks, bonds, mutual funds, annuities and crypto bought through a bank are not covered, even though the bank sold them.

Questions people ask

How much does the FDIC insure?

As of 2026, $250,000 per depositor, per insured bank, for each ownership category, such as single accounts, joint accounts and certain retirement accounts. Joint accounts are insured up to $250,000 per co-owner.

How long does it take to get money back after a bank fails?

Usually one or two business days. Most often the FDIC moves the accounts to another bank over a weekend, and customers use them on Monday as before.

Does deposit insurance cover crypto?

No. Crypto assets are not deposits and are not insured by the FDIC, even when they are bought through an app linked to a bank account.

About the numbers

Limits and rules as published by the FDIC and in EU law (checked November 2026). The example is simplified; the FDIC’s own estimator gives the exact coverage of real accounts.
This page explains a term. It is not investment advice.