Is a CD FDIC Insured? Coverage Limits Explained

If you’re considering putting your savings into a CD, one of the first questions you should ask is whether your money is actually protected. Here’s exactly what’s covered, what isn’t, and what happens if your bank fails.

Is a CD FDIC Insured?

Yes. A Certificate of Deposit (CD) held at an FDIC-member bank is insured by the Federal Deposit Insurance Corporation (FDIC), just like a regular savings or checking account. This means your principal and any earned interest are protected if the bank fails.

How Much Coverage Do You Get?

The FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category. This means:

A single CD worth $200,000 at one bank is fully covered.
If you have $300,000 in CDs at the same bank under the same ownership category, only $250,000 is covered — the remaining $50,000 is at risk.
You can increase your coverage by spreading CDs across different banks, or by using different ownership categories (individual account, joint account, retirement account) at the same bank.

What Counts as “Per Ownership Category”?

The FDIC treats these as separate categories, each with its own $250,000 coverage:

Single accounts (owned by one person)
Joint accounts (owned by two or more people)
Certain retirement accounts (like IRAs)
Trust accounts

This means a married couple with a joint CD and individual CDs at the same bank could have more than $500,000 fully insured, depending on how the accounts are structured.

What’s NOT Covered

The FDIC does not cover:

Investments in stocks, bonds, or mutual funds (even if purchased through your bank)
Cryptocurrency
Losses due to bank fraud unrelated to bank failure
Safe deposit box contents

What Happens If Your Bank Fails?

If an FDIC-insured bank fails, the FDIC typically responds within a few business days — often by the next business day. In most cases, one of two things happens:

Your account is transferred to another FDIC-insured bank, and you continue banking as normal with new account details.
You’re paid directly by the FDIC, usually by check, for the insured amount.

If you have a CD at a failed bank, you’ll generally have the option to withdraw the funds without the usual early withdrawal penalty, since the bank failure isn’t something you caused.

How to Check If Your Bank Is FDIC-Insured

Most U.S. banks are FDIC-insured, but it’s worth confirming before opening a CD. You can check using the FDIC’s BankFind tool at fdic.gov, or simply look for the FDIC signage at your bank or on its website.

Note: Credit unions are not FDIC-insured, but most are covered by the NCUA (National Credit Union Administration) under similar $250,000 limits.

Frequently Asked Questions

Is my CD’s interest also FDIC insured, not just the principal?
Yes, both the principal and any accrued interest are covered, up to the $250,000 limit per ownership category.

What if I have CDs at two different banks?
Each bank gets its own separate $250,000 coverage limit, so splitting your money across banks increases your total protected amount.

Are online banks FDIC insured?
Most reputable online banks are FDIC-insured, but always verify this before depositing funds — check the FDIC BankFind tool to confirm.

Does FDIC insurance cost anything?
No, FDIC insurance is automatic and free for depositors at insured banks — there’s no separate fee or sign-up required.

What if my CD balance exceeds $250,000?
Consider splitting funds across multiple banks or ownership categories (individual, joint, retirement account) to stay fully insured, or look into CDARS (Certificate of Deposit Account Registry Service), which spreads large deposits across multiple banks automatically.

Sources: FDIC.gov — Deposit Insurance, FDIC BankFind

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