Yes, certificates of deposit are FDIC insured up to $250,000 per depositor, per bank, per account ownership category

A certificate of deposit (CD) held at an FDIC-insured bank is protected by the same federal insurance that covers your savings account or checking account. The Federal Deposit Insurance Corporation insures the money you deposit, the interest it earns, and the principal amount you agreed to leave untouched for a set period — whether that period is three months or five years.

The $250,000 limit applies to the total of all CDs you hold at a single bank under a single ownership category. If you have a CD in your name alone and another CD in your name alone at the same bank, the FDIC counts both toward your $250,000 limit at that institution. If you have a CD in a joint account with your spouse at the same bank, that joint CD is insured separately up to $250,000, because it falls under a different ownership category.

FDIC insurance covers your CD even if the bank fails. You do not have to do anything to set up this protection — it is automatic at any bank that displays the FDIC logo or states it is FDIC-insured. The FDIC will pay you the full amount of your CD plus accrued interest, up to the $250,000 limit, within a few business days of the bank's closure.

Key Takeaways

  • The FDIC insures CDs up to $250,000 per depositor per bank per ownership category, covering both principal and accrued interest.
  • If you hold multiple CDs at the same bank in your name alone, they are added together and count toward a single $250,000 limit.
  • Joint CDs, CDs held in trust, and CDs in retirement accounts are each insured separately up to $250,000 because they fall under different ownership categories.
  • You can hold CDs at multiple banks and receive full $250,000 FDIC protection at each one, because the insurance limit is per bank, not per person.
  • FDIC insurance is automatic and requires no action on your part; you do not need to register your CD or file a claim unless the bank fails.

How the $250,000 limit works across multiple CDs at one bank

The FDIC insurance limit is not per CD — it is per depositor, per bank, per ownership category. This means if you have three separate CDs at the same bank, all in your individual name, the FDIC will insure a combined total of $250,000 across all three, not $250,000 for each one.

If you have $80,000 in a one-year CD, $100,000 in a three-year CD, and $90,000 in a five-year CD, all at the same bank in your name alone, your total insured amount is $250,000. The extra $20,000 ($80,000 + $100,000 + $90,000 = $270,000) is not covered by FDIC insurance. If the bank fails, you would lose that $20,000.

To protect more than $250,000 in CDs, you must spread the money across different banks or use different ownership categories at the same bank. A CD in your individual name and a CD in a joint account with your spouse at the same bank are each insured separately, so you could have $250,000 in the individual CD and $250,000 in the joint CD, both fully protected.

Ownership categories that each get their own $250,000 limit

The FDIC recognizes several ownership categories, and each one has its own separate $250,000 insurance limit at the same bank. Understanding which category your CD falls into helps you know whether you are fully protected.

Individual ownership covers a CD in your name alone. Joint ownership covers a CD held by two or more people with equal rights to the account; the FDIC insures the joint CD separately from any individual CDs you hold at that bank. Retirement accounts — including traditional IRAs, Roth IRAs, SEP-IRAs, and straightforward IRAs — each have their own $250,000 limit separate from your individual CDs. Trust accounts are insured separately if the trust is properly titled and the beneficiaries are named. Payable-on-death (POD) accounts — where you name a beneficiary to receive the CD if you die — are insured separately from individual CDs.

If you have a traditional IRA CD and a Roth IRA CD at the same bank, they are each insured up to $250,000 separately because they are different account types. However, if you have two traditional IRA CDs at the same bank, they are added together and share a single $250,000 limit.

FDIC insurance does not cover early withdrawal penalties

FDIC insurance protects the principal and accrued interest in your CD, but it does not protect you from the early withdrawal penalty if you need to cash out before the maturity date. If your CD has a $500 early withdrawal penalty and you withdraw the money before the term ends, the FDIC will insure the remaining balance after the penalty is deducted, but the penalty itself is your responsibility.

The early withdrawal penalty is a contractual fee between you and the bank, not a loss of deposits. The FDIC's role is to protect your money if the bank fails, not to protect you from the terms you agreed to when you opened the CD.

What happens to your CD if the bank fails

If an FDIC-insured bank closes, the FDIC takes over and pays depositors their insured balances. For CDs, this means you receive the full principal amount plus any interest that has accrued up to the date of the bank's failure, up to the $250,000 limit per ownership category.

The FDIC typically pays within a few business days of the bank's closure. You do not have to file a claim or take any action — the FDIC automatically identifies all depositors and their balances from the bank's records. If your CD balance is under $250,000, you will receive the full amount. If it is over $250,000, you will receive $250,000 and lose the excess.

Bank failures are rare. The FDIC has been insuring deposits since 1933, and the vast majority of banks remain open and solvent. FDIC insurance exists as a safety net, not as a common occurrence.

How to verify a bank is FDIC insured before opening a CD

Before you open a CD, confirm that the bank is FDIC-insured. You can search the FDIC's Bank Find tool on the FDIC website by entering the bank's name and state. The tool shows whether the bank is insured, which FDIC region it belongs to, and the date it became insured.

Most traditional brick-and-mortar banks and many online banks are FDIC-insured. Credit unions are not FDIC-insured; instead, they are insured by the National Credit Union Administration (NCUA), which offers the same $250,000 per account type protection. If you are opening a CD at a credit union, look for the NCUA logo instead.

Some online banks and financial institutions are not FDIC-insured. If a bank does not display the FDIC logo or does not mention FDIC insurance on its website, contact the bank directly or use the Bank Find tool to confirm its status before depositing money.

Frequently Asked Questions

If I have $300,000 and want to open CDs at two different banks, will all of it be insured?

Yes. If you open a $150,000 CD at Bank A and a $150,000 CD at Bank B, both are fully insured because the FDIC limit is per bank. You can hold up to $250,000 at each bank and receive full coverage at each one. The insurance limit resets at each separate institution.

Are CDs at online banks FDIC insured?

Many online banks are FDIC-insured, but not all. Check the bank's website for the FDIC logo or use the FDIC's Bank Find tool to confirm. Online banks that are FDIC-insured offer the same $250,000 protection as traditional banks, even though you cannot walk into a physical branch.

What if my CD is held in a trust with multiple beneficiaries?

Trust CDs are insured separately from individual CDs, up to $250,000 total. If the trust names multiple beneficiaries, the FDIC may provide additional coverage depending on how the trust is structured and whether each beneficiary's interest is clearly defined. Contact the FDIC or your bank for details about your specific trust arrangement.

Does FDIC insurance cover the interest my CD earns?

Yes. FDIC insurance covers both the principal you deposit and the interest that accrues, up to the $250,000 limit. If you have a $240,000 CD that earns $8,000 in interest before the bank fails, the FDIC will insure the full $248,000.

Can I lose money on a CD if the bank fails?

Only if your balance exceeds $250,000 in the same ownership category at that bank. If you have $280,000 in a CD in your individual name at one bank, the FDIC will insure $250,000 and you will lose the $30,000 excess. Spreading money across multiple banks or ownership categories prevents this loss.