Are CDs FDIC insured? How the $250,000 limit works

A bank CD can be insured, but the limit is not per CD

If your CD is opened at an FDIC-insured bank, it can be covered by FDIC insurance. The part people often miss is the limit: it is generally $250,000 per depositor, per insured bank, per ownership category.

Those three parts matter. It is not simply "$250,000 per CD."

Before moving a large balance, check the actual bank that will hold the deposit. A familiar brand name or an app showing CD offers is not enough by itself. You can confirm the institution with the FDIC's BankFind Suite.

Several CDs at one bank do not create separate limits

Suppose Maria has these single-owner deposits at the same FDIC-insured bank:

The accounts are added together because they are owned by the same depositor, at the same bank, in the same ownership category. Under the standard limit, $250,000 would be insured and $25,000 would be above that limit.

Opening another CD at a different branch of the same bank would not create a new $250,000 limit. The FDIC explains that branches of the same separately chartered bank are not insured separately.

A different insured bank can give you a separate limit

If Maria instead puts one CD at Bank A and another at separately chartered Bank B, each bank can have its own insurance limit. The key is making sure they are actually different FDIC-insured banks, not two brand names or branches of the same bank.

This matters when building a large CD ladder. Add checking, savings, money market deposit accounts, and CDs held in the same ownership category at each bank before assuming every rung is covered.

Joint, trust, and retirement accounts can change the limit

Common ownership categories include:

• Single accounts
• Joint accounts
• Certain retirement accounts
• Trust accounts
• Business accounts

Different ownership categories may receive separate coverage. But do not retitle accounts just to chase a higher number. Joint, trust, retirement, and business accounts can change the insurance math, and the details matter.

For a personal calculation, use the FDIC's Electronic Deposit Insurance Estimator or contact the FDIC. Complex trust and business accounts are worth checking account by account.

Interest counts toward the balance

Interest counts too. If a CD starts near $250,000, the interest it earns can push the balance above the limit during the term.

Use the CD calculator to estimate the maturity balance, then combine it with other deposits in the same ownership category at that bank.

For example, a $245,000 CD earning 4.50% APY for one year would have an estimated maturity value of about $256,025 before taxes. If it is the depositor's only single-owner account at that bank, the amount above $250,000 would be outside the standard limit.

Credit union certificates use NCUA insurance

Credit unions often call CDs "share certificates." At a federally insured credit union, eligible share certificates are generally covered by NCUA insurance rather than FDIC insurance.

The standard NCUA amount is also generally $250,000 per member-owner, per federally insured credit union, per ownership category. Confirm the credit union's insured status and use the NCUA Share Insurance Estimator for larger balances.

Some state-chartered credit unions may use private insurance, so do not assume every credit union account has federal coverage.

Brokered CDs require one more check

A brokered CD may still be issued by an FDIC-insured bank, but you need to know which bank issued it. Then include any other deposits you already hold at that same bank. If the broker spreads money across several banks, check the records for each issuing institution.

Brokered CDs can also have different exit rules. You may have to sell in a secondary market, possibly at a loss, instead of paying a standard bank early withdrawal penalty.

A four-step insurance check

Before opening a large CD:

1. Identify the bank or credit union that will hold the deposit.
2. Confirm its FDIC or NCUA insured status.
3. Add all deposits in the same ownership category at that institution.
4. Include expected interest through maturity.

If the result approaches the limit, use the official estimator before moving the money.

Sources

• FDIC deposit insurance FAQs
• FDIC Your Insured Deposits
• FDIC Electronic Deposit Insurance Estimator
• NCUA share insurance overview
• SEC Investor.gov brokered CD bulletin