The Federal Deposit Insurance Corporation (FDIC) provides insurance coverage for deposit accounts, which includes certificates of deposit (CDs). The insurance coverage is up to $250,000 per depositor, per FDIC-insured bank, and per ownership category.
This means that if you have multiple deposit accounts in the same bank, the total insurance coverage for all of your accounts is $250,000. If you have accounts in different FDIC-insured banks, each bank will provide separate insurance coverage of up to $250,000 for your deposits.
The ownership category refers to how the account is owned. There are different ownership categories such as single accounts, joint accounts, revocable trust accounts, irrevocable trust accounts, and retirement accounts. Each ownership category is insured up to $250,000 per depositor.
For example, if you have a single account with $250,000 and a joint account with your spouse with $250,000 in the same FDIC-insured bank, both accounts are insured up to $250,000 each. This means that your total insurance coverage for both accounts is $500,000.
However, if you have a single account with $250,000 and a joint account with your spouse with $250,000 in different FDIC-insured banks, each account is insured up to $250,000 by their respective banks. This means that your total insurance coverage for both accounts is $500,000.
It is important to note that the FDIC insurance coverage only applies to deposit accounts such as checking accounts, savings accounts, and CDs. It does not cover other financial products such as stocks, bonds, mutual funds, or annuities.
In addition, the FDIC insurance coverage does not protect against losses due to fraud or theft. It only provides insurance coverage for deposits in case the bank fails.
To ensure that your deposits are fully insured, it is important to understand the FDIC insurance coverage limits and to spread your deposits across different ownership categories and FDIC-insured banks if necessary. This will help you maximize your insurance coverage and protect your deposits in case of a bank failure.