Does the FDIC cover business accounts?

Bank deposits owned by corporations, partnerships, limited liability companies (LLCs) and unincorporated associations – including for-profit and not-for-profit organizations – are FDIC insured accounts. Eligible business accounts for coverage from the Federal Deposit Insurance Corporation (FDIC) are checking accounts, savings accounts, money market deposit accounts, certificates of deposit (CDs), cashier's checks, money orders and other official items issued by banks covered by the FDIC. FDIC coverage is meant to ensure that consumers and businesses have confidence in the U.S. banking and deposit system.

Requirements for FDIC Coverage of Business Accounts

There are two requirements for a business account to qualify for FDIC coverage.

  1. The corporation, partnership, LLC or unincorporated organization making the deposit has to be organized under applicable state law. Deposits made by sole proprietorships, revocable trusts or government entities are not considered to be business accounts.
  2. The main purpose of operation of the corporation, partnership, LLC or unincorporated organization making the deposit has to be other than to increase deposit insurance coverage by the FDIC.

Details of FDIC Coverage of Business Accounts

As with consumer accounts, total deposits in eligible business accounts from a corporation, partnership, LLC or unincorporated organization at a bank are covered up to $250,000. For example, if a corporation owns a checking account with $150,000 and a CD for another $150,000 at the same bank, the FDIC only insures $250,000, not the remaining $50,000. The corporation would need to transfer the remaining $50,000 to another bank for those funds to be eligible for FDIC coverage.

Deposits in personal accounts from owners or members of the corporation, partnership, LLC or unincorporated organization at the same bank are not used to calculate the total deposits of a business account.

Use the FDIC's estimator tool to calculate the coverage of your business accounts at an FDIC-insured bank.