Following the shutdown of Silicon Valley Bank and Signature Bank a lot of people are wondering — is the money in my bank account safe?
The good news is nearly all banks have insurance through the Federal Deposit Insurance Corporation (FDIC). This protection covers $250,000 "per depositor, per insured bank, for each account ownership category." This insurance covers a range of deposit accounts, including checking, savings and money market accounts.
The issue with the recent bank closures is that companies and high-net-worth individuals had deposits far above what is covered by the FDIC. However, the U.S. government has said it will fully protect all depositors at Silicon Valley Bank and Signature Bank and ensure that everyone has full access to their funds, including deposits that exceed the FDIC limit.
Below, CNBC Select details what you need to know about FDIC insurance.
Why your bank deposits are safe and how the FDIC insurance limit works
Nearly all banks are covered by the FDIC and FDIC protection applies to a wide range of deposit accounts, including:
- Checking accounts
- Savings accounts
- Money market deposit accounts
- Certificates of deposit (CD)
- Prepaid cards (assuming certain FDIC requirements are met)
- Cashier's checks, money orders and other official items issued by a bank
- Negotiable order of withdrawal (NOW) accounts
Where it can be a bit confusing is that the FDIC's coverage limit is $250,000 per person, per bank and per account type. But a checking account and savings account won't necessarily be in different categories. Here's how the FDIC classifies accounts:
FDIC deposit insurance coverage limits
| Type of account owner category | Coverage limit |
|---|---|
| Single accounts | $250,000 per owner |
| Joint accounts | $250,000 per co-owner |
| Certain retirement accounts | $250,000 per owner |
| Revocable trusts | $250,000 per owner per unique beneficiary |
| Corporation, partnership and unincorporated association | $250,000 per corporation, partnership or unincorporated association |
| Irrevocable trusts | $250,000 per unique beneficiary that's entitled to the account |
| Employee benefit plans | $250,000 per plan participant that's entitled to the account |
| Government accounts | $250,000 per official custodian (more coverage may be available) |
As an example, if you had a $100,000 CD and $175,000 in a savings account at the same bank and both accounts were only under your name, that combined total ($275,000) would be insured for $250,000. However, if you had a joint savings account, then the savings account balance would fall under a different category.
If you have more than $250,000 in deposit accounts, one way to protect the money is to deposit it in different account categories or to open accounts with different banks. As you're shopping around for a deposit account, you can find out if a bank is insured with the FDIC's BankFind tool. It's also a good idea to open checking accounts or savings accounts withno monthly maintenance fees and the highest interest rate you can find.
Below are a few of the best deposit accounts with FDIC insurance, according to CNBC Select's rankings:
Ally Bank Spending Account
Ally Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10% less than $15,000 minimum daily balance; 0.25% over $15,000 minimum daily balance
Free ATM network
43,000+ Allpoint® ATMs
ATM fee reimbursem*nt
Up to $10 per statement cycle
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
Capital One 360 Checking®
Capital One Bank is a Member FDIC.
Monthly maintenance fee
$0
Minimum deposit to open
$0
Minimum balance
None
Annual Percentage Yield (APY)
0.10%
Free ATM network
70,000+ Capital One®, MoneyPass andAllpoint® ATMs
ATM fee reimbursem*nt
None
Overdraft fee
$0
Mobile check deposit
Yes
Terms apply.
LendingClub High-Yield Savings
LendingClub Bank, N.A., Member FDIC
Annual Percentage Yield (APY)
5.00%
Minimum balance
No minimum balance requirement after $100.00 to open the account
Monthly fee
None
Maximum transactions
None
Excessive transactions fee
None
Overdraft fees
N/A
Offer checking account?
Yes
Offer ATM card?
Yes
Terms apply.
Marcus by Goldman Sachs High Yield Online Savings
Goldman Sachs Bank USA is a Member FDIC.
Annual Percentage Yield (APY)
4.40% APY
Minimum balance
None
Monthly fee
None
Maximum transactions
At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account
Excessive transactions fee
None
Overdraft fee
None
Offer checking account?
No
Offer ATM card?
No
Terms apply.
What types of accounts aren't covered by the FDIC insurance limit?
Balances above the FDIC's insurance limit and investments that are not "deposit products" won't qualify for FDIC protection, this includes:
- Stocks
- Bonds
- Mutual funds
- Crypto assets
- Life insurance policies
- Annuities
- Municipal securities
- Safe deposit boxes or their contents
- U.S. Treasury bills, bonds or notes (these investments are backed by the full faith and credit of the U.S. government)
Bottom line
The FDIC insures deposit accounts up to $250,000 per owner, per bank and per account category. Most banks are protected by the FDIC, so there's no need to panic and withdraw money that is protected. To calm fears, the federal government has gone a step further and ensured that depositors at the banks that recently failed will have full access to their money.
Read more
7 common banking fees and how to avoid them
Here are the best money market accounts of March 2023
If you prefer to bank in person, these are the best brick-and-mortar checking accounts
How a money market account can help you save while giving you access to your money
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
