NCUA & FDIC Insurance Limits: How Coverage Is Calculated (2024)

Although bank and credit union failures are rare, they’re not unprecedented. That’s why it’s important to know that government insurance — backed by the full faith and credit of the U.S. government — will protect your deposits even when your financial institution doesn’t. The track record is clear: Since the Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) were founded, no bank account holder or credit union member has ever lost a penny of federally insured deposits.

Currently, both the FDIC and the NCUA insure deposits of up to $250,000. But that doesn’t mean you can’t protect more than that with government insurance. The amount of coverage you receive ultimately depends on the types of accounts you have and whether you have a joint account holder. Read on to learn the present coverage limits and how they apply to your accounts.

Coverage Limits by Account Category

As long as your financial institution is insured by the FDIC, which insures bank accounts, or NCUA, which insures credit union accounts, the coverage limits available from either federal agency will be the same, which is currently $250,000 per depositor, per financial institution (not per branch location). In the unlikely event that your bank or credit union fails, the appropriate federal agency will match your deposit dollar-for-dollar, including the principal amount plus any interest that accrued up to the date your financial institution permanently closes its doors.

However, there are rules regarding how coverage limits apply to different categories of accounts (explained in the section titled How Coverage Limits Apply ). The table below summarizes the account categories that are insured and the applicable coverage amount for each.

Qualified & Nonqualified Accounts

FDIC and NCUA protections are basically identical, save for the names they assign to different types of accounts (e.g., a “checking account” is called a “share draft account” at a credit union).

The table below lists the accounts that qualify for FDIC or NCUA insurance.

The exclusions to the FDIC and NCUA coverage are also the same, but you should always check with each institution for special rules, especially as they apply to insurance products. The table below includes the types of accounts that do not receive deposit insurance protection.

*Robberies and thefts are treated differently and are not covered by the FDIC or NCUA. When funds are stolen, they are instead covered by a “blanket bond” policy. This type of insurance protects banks and credit unions in cases of embezzlement, defalcation, earthquake, fire, flood, robberies, and other cases in which funds are lost.

How Coverage Limits Apply

Understanding FDIC and NCUA coverage rules can be tricky at first, but you’ll soon learn that it’s actually quite easy. To keep our explanation simple, consider the following two scenarios:

Scenario 1: One Owner, Multiple Accounts, Same Account Category

Let’s assume you have three qualifying individual accounts at the same institution: a checking account, a savings account and a Certificate of Deposit (CD). Because you are the sole owner of these accounts, all three would fall under the same account category: “Single Ownership Accounts.” That means all three account balances will be aggregated and insured as one. In other words, you’ll receive up to $250,000 in total coverage for all three accounts combined, not for each individual account.

Here’s a summary of what that looks like, assuming you have $175,000 deposited in each of the three accounts:

*Please note that “Sample Actual Balance” amounts are hypothetical examples only and are intended for illustration purposes.

Scenario 2: Multiple Owners, Multiple Accounts, Separate Account Categories

In this scenario, let’s assume you and your spouse own multiple qualifying accounts at the same institution: your individual checking account, a joint savings account you share with your spouse and separate IRA accounts for each of you. This is where it gets confusing. Each of these accounts falls under a different account category and therefore will be insured separately.

You’ll be covered up to $250,000 for your checking account (your only account in the “Single Ownership” category), up to $500,000 for your joint savings account (“Joint Ownership” category, with $250,00 in insurance per co-owner) and up to $250,000 each for your individual IRA accounts (“Retirement Account” category with each having a separate owner) for a total of up to $1,250,000 in coverage.

Here’s a summary of what that looks like, again assuming a balance of $175,000 in each account:

*Please note that “Sample Actual Balance” amounts are hypothetical examples only and are intended for illustration purposes.

If you still can’t wrap your head around how coverage limits apply to different accounts, you can calculate the amount of protection you’ll receive by using one of the following tools from each of the two federal agencies:

• FDIC’s Electronic Deposit Insurance Estimator (EDIE)
• NCUA’s Electronic Share Insurance Calculator (ESIC)

Tips for Maximizing FDIC & NCUA Insurance Coverage

Most people don’t keep more than $250,000 in bank or credit union accounts. But if you do, you may find the following advice useful in making sure you have insurance coverage for all of your funds.

• Open Accounts at Multiple Institutions: By spreading your money across different federally insured accounts at more than one institution — as opposed to pooling them at one bank or credit union — you will receive additional protection. Note that opening several accounts at different branches won’t increase your coverage because the insurance protects accounts on a per-depositor, per-institution basis.
• Divide Your Accounts into Different Categories: If you’re an individual who has a checking account, savings account or other account type that falls under the same category, all of your accounts will be lumped together and insured in combination, up to $250,000. Suppose, however, that you close all but your checking account, to which you add an additional owner, such as your spouse, and each of you then opens an IRA account at the same institution. Because joint accounts are covered per owner and retirement accounts fall under their own category, your money will be 100% covered.
• Ask About Additional Private Coverage: Most consumers’ balances won’t exceed FDIC or NCUA limits. If yours do, you can ask your bank or credit union if it offers private deposit insurance as supplemental coverage for amounts exceeding federal limits. Some institutions provide additional private insurance at no charge.

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