Are CDs FDIC Insured? (2024)

With your savings, you want to make sure your money is protected no matter what. When it comes to CDs, backing from the Federal Deposit Insurance Corp. means that you can almost always rest assured.

Today’s high interest rates make certificates of deposit a great way to earn 5% or more on cash you don’t need right away. But a spate of recent bank failures, sparked by the collapse of Silicon Valley Bank in March, has raised questions in some investors’ minds about whether their money was truly safe.

In fact, for the vast majority of investors, there is no need to worry about money invested in CDs. Still if you own a CD (or for that matter hold a checking or savings account) it’s important to know the ins and outs of FDIC insurance.

Read on to learn about FDIC insurance rules and limits for CDs.

Are CDs FDIC insured?

The short answer to the question, “Are CDs FDIC insured?” is yes.

Like checking, savings and money-market accounts, bank deposits held in CDs are protected by FDIC insurance up to the deposit insurance limit of $250,000.

The Federal Deposit Insurance Corp. is a government agency that insures bank customers’ deposits, in addition to regulating banks’ financial soundness and ensuring their compliance with consumer-protection laws.

FDIC coverage is automatic when you open an account or CD at a member bank—at no direct cost to you. Of course, there is no free lunch. You do pay indirectly. Banks are required to pay premiums to fund the pool of money the FDIC uses to backstop deposits if a bank fails.

While nearly all banks are FDIC members, you can verify a bank’s FDIC membership using the BankFind tool on the agency’s website. You can also look for the FDIC logo on your bank’s website or printed marketing materials. No depositor has ever lost money from the failure of an FDIC member bank.

How to get more FDIC Insurance

While the $250,000 deposit insurance limit is more than enough for most Americans’ personal savings, there are a few ways to extend your coverage if you plan to keep a lot of money in cash or CDs.

Since the $250,000 threshold is per account holder, per bank and per deposit type or “ownership category,” one simple tactic is to divide your money between two or more institutions and keep the amount at each one below the limit.

If you open a jointly-owned CD—say, with your spouse—you can double your protection up to $500,000, since FDIC coverage extends to $250,000 per account co-owner.

The FDIC has an online tool called the Electronic Deposit Insurance Estimator that can help you calculate your amount of FDIC coverage by plugging in different account scenarios.

One detail you should check, particularly if your eye has been caught by the high CD yields offered by many digital banks, is its official identity as per the FDIC or its FDIC member number. A number of bricks-and-mortar banks have online divisions with brand names that are different from the “parent” bank, and nonbank fintechs typically partner with traditional banks to provide deposit insurance.

Even though the names or website addresses might be different, the FDIC views them as being the same institution, so the $250,000 limit applies to accounts across these different brands. For instance, online-only Vio Bank is a division of Oklahoma’s MidFirst Bank, and both MySavingsDirect and DollarSavingsDirect are online brands of New York-based Emigrant Bank.

You might come across unfamiliar bank brand names like these in roundups of top savings rates or top CD rates. If you have money saved with a bank as well as its digital subsidiary or neobank partner, it’s important to pay attention to the total value of your deposits to make sure you don’t exceed FDIC limits.

What CDs aren’t FDIC insured?

There are a few types of CDs that aren’t eligible for FDIC coverage—but that doesn’t mean your money isn’t protected.

Credit union CDs

CDs issued by credit unions are not protected by the FDIC—although that doesn’t mean you should write off these certificates, especially since some of them have the best CD rates you can find right now.

Credit unions aren’t regulated by the FDIC, but the CDs they issue—which are sometimes called “share certificates”—are protected by the National Credit Union Administration, the government agency that regulates credit unions. The NCUA has a deposit insurance program that mirrors that of the FDIC, with the same $250,000 limit per institution and per ownership category.

Foreign bank CDs

Foreign CDs are unlikely to be FDIC-protected. If you buy a foreign CD through a U.S.-based bank, you are eligible for FDIC coverage, but most don’t offer these products to customers. To buy a foreign CD, you would most likely have to purchase it directly from a non-U. S. bank. If the bank doesn’t have an insured branch in the U.S., that CD would not be covered by FDIC insurance.

Research from the Financial Stability Board, an international monitoring group for banking systems, noted that both the details of other countries’ consumer protections vary considerably. (Foreign CDs can also be riskier because you can lose money on exchange rate fluctuations.)

Brokered CDs

Sold by brokerage companies and independent brokers rather than banks, brokered CDs are not always FDIC insured. Brokered CDs can carry higher interest rates than CDs you would buy directly from a bank, but are more complex. The broker effectively acts as a wholesaler, bundling together individuals’ investments to get a better rate of return on the deposited funds.

While brokered CDs can come from FDIC member banks, not all do, says the Financial Industry Regulatory Authority. “Although most brokered CDs are bank products, some may be securities, which won’t be federally insured,” the organization notes. In addition, because they are structured with the broker as a middleman between the bank and individual investors, you might not be entitled to the full $250,000 of deposit insurance protection, the Securities and Exchange Commission warns.

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