What Are the FDIC Rules for CDs?

Certificates of deposit (CDs) work like a savings account as places to put a specific amount of money that will earn interest during a fixed period of time, often ranging from 30 days to five years. As with other bank accounts, the money in the CD is insured for up to a limit of $250,000 if the bank is a member of the Federal Deposit Insurance Corporation (FDIC).

Key Takeaways

  • Always ask if the banking institution is FDIC-insured before obtaining a CD. 
  • Make sure your total deposit accounts at one bank do not exceed the FDIC’s $250,000 coverage limit. 
  • If necessary, take out your CDs at a different bank (or banks) to keep your deposit accounts under the $250,000 FDIC limit for coverage.

How Exactly Does the FDIC Insure a CD?

The FDIC insures up to $250,000 per depositor, per FDIC-insured bank, per ownership category. That means if you have a checking account balance of $20,000, a savings account balance of $100,000, and a CD in the amount of $50,000 all at the same bank, you have a total of $170,000 that is covered by the FDIC insurance. 

However, if those balances exceed $250,000, the FDIC would not cover any amount more than $250,000. Therefore, it’s important to keep an eye on your account balances because you may need to move an account to a different bank to make sure your total assets are covered by the FDIC. 

Are CDs With an Online Bank FDIC-Insured?

Yes, provided the online bank is FDIC-insured. This should be noted on the online bank’s website, but if it’s not or you are not sure, speak with a bank representative to confirm if the online bank is FDIC-insured. FDIC coverage limits for online banks are the same as with brick-and-mortar banks: $250,000 per depositor, per FDIC-insured bank, per ownership category.

Is My Broker CD FDIC-Insured?

Unlike CDs available at banking institutions, broker CDs must be purchased from brokerage firms and independent salespeople. If the brokered CD is set up in your name with an FDIC-insured bank, it will be covered by the FDIC up to the $250,000 limit per depositor, per FDIC-insured bank, per ownership category.

However, if the bank is not FDIC-insured, it will not be covered. It’s important to find out beforehand where the brokered CD will be set up to ensure proper FDIC coverage. 

How Do I Get My Money if My Bank Fails?

If your bank fails, the FDIC could replace your insured funds in one of two ways. Within a few days following the bank closure, the FDIC could set up and fund a new account in your name at another bank with the amount you were insured for, or the FDIC could issue you a check for the insured amount. 

How Do I Know My Bank or Credit Union Is FDIC-Insured?

Credit unions are not insured by the FDIC; instead, they are insured by the National Credit Union Administration (NCUA), which also insures deposits for up to $250,000. To find out if your bank is FDIC-insured, ask your local bank representative. Many banks also display an FDIC sign stating it is covered by the FDIC. The FDIC’s BankFind tool also can find FDIC-insured banks near you. 

How Can I Make Sure All My CDs Are Insured by the FDIC?

First, check with your banking institution to make sure it’s an FDIC-insured bank. Second, make sure your deposit accounts don’t exceed the $250,000 limit per depositor, per FDIC-insured bank, per ownership category.

If you aren’t sure, you can input your deposit account information into the FDIC's Electronic Deposit Insurance Estimator (EDIE), visit the FDIC Information and Support Center and submit a request for deposit insurance coverage information, or call the FDIC at 1-877-ASK-FDIC (1-877-275-3342). 

Does the FDIC Protect My CD From Identity Theft or Fraud?

No, the FDIC only protects your CD if your bank fails. You should talk with your banking institution to find out what security and protection elements are in place in the event of identity theft or fraud

The Bottom Line

CDs can be a great way to save money and earn interest to boost your savings. Getting CDs from an FDIC-insured bank protects that money up to $250,000 per depositor, per FDIC-insured bank, per ownership category. It’s important to always confirm your banking institution is FDIC-insured and that the total of all your deposit accounts does not exceed $250,000 to make sure your CDs are protected by the FDIC. 

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
  1. Federal Deposit Insurance Corporation. "Deposit Insurance FAQs."

  2. Financial Industry Regulatory Authority. "Certificates of Deposit (CDs)."

  3. National Credit Union Administration. "Share Insurance."