Are CDs FDIC-insured?

A CD at an FDIC-insured bank is covered up to $250,000 if the bank fails, including the interest it has earned. The catch is that the limit is shared: Your CD counts toward the same $250,000 as your checking and savings at that bank, and a CD bought through a broker or app is covered only if your money actually lands at an insured bank.

Yes, CDs are insured by the FDIC

CDs from FDIC-insured banks are covered by the Federal Deposit Insurance Corporation (FDIC). If the bank fails, the FDIC protects your insured balance, up to the coverage limit.

Check the bank yourself before you open a CD. Don’t rely on the bank’s website or an ad. Search the bank’s name in the FDIC’s free BankFind Suite, and make sure the site you’re on matches the official website BankFind lists.

Coverage limits

The FDIC covers $250,000 per depositor, per insured bank, for each account ownership category. An ownership category is about who owns the account, not what kind of account it is. Everything in your name alone at one bank shares one $250,000 limit, including:

• Checking accounts
• Savings accounts
• Money market deposit accounts (MMDAs)
• Certificates of deposit

So if you have a checking account, a savings account, and a CD at the same bank, the FDIC insures up to $250,000 across all three. A joint account is a separate category, and each co-owner is covered up to $250,000 for their share.

Run the numbers >> Kikoff’s CD calculator compares what you’d earn across different rates and terms.

What the three parts actually mean

1. Per depositor — per person, not per account. Open five savings accounts in your own name at the same bank and they share one $250,000 limit.

2. Per insured bank — each bank counts separately. The same $250,000 applies again at a different institution. But a bank with several branch names may be one charter, so two “banks” can share a limit.

3. Per ownership category — how you hold the money, not what kind of account it is. Money you hold alone is one category. A joint account is another. Certain retirement accounts are a third.

Say you have $250,000 in CDs in your own name and a $400,000 joint account with your spouse, all at one bank. Your single accounts are covered to $250,000. Your half of the joint account is $200,000, also covered. That’s $450,000 insured at one bank.

When a CD isn’t FDIC-insured

A CD without FDIC insurance isn’t necessarily risky. It may be insured by a different agency, or its coverage may depend on a company in the middle.

Credit union share certificates

The FDIC insures banks, not credit unions. Credit union CDs, often called share certificates, are insured by the National Credit Union Administration (NCUA), with the same limit: $250,000 per owner, per insured credit union, for each ownership category. A few state-chartered credit unions use private insurance instead. Use the NCUA’s Credit Union Locator to check.

Brokered CDs and third-party platforms

A brokered CD is issued by a bank but sold to you through a brokerage firm. Fintech apps that offer CDs work similarly: they place your money at a partner bank. Either way, the FDIC insurance comes from the bank, and it reaches you only if you, not the broker or app, actually own the funds and the records show it.

The gap is the middleman. FDIC insurance covers the bank failing. It doesn’t cover the broker or app failing, or your money never reaching the bank. Before you buy, ask which bank issues the CD and look up that bank in the FDIC’s BankFind. If you already keep money at that bank, the brokered CD counts toward the same $250,000 limit.

Read more >> NCUA vs. FDIC: What’s the Difference?

What happens to your CD if a bank fails?

You don’t have to file a claim for insured deposits. Usually, another bank takes over the failed bank’s deposits, and your CD moves there automatically. The new bank doesn’t have to keep your CD’s rate or terms, but you can typically withdraw your money without a penalty.

If no bank takes over, the FDIC pays you directly, and payments usually begin within a few days of the closing. Either way, you’re covered for your principal plus interest earned through the day the bank closed.

Bottom line

A CD at an FDIC-insured bank or NCUA-insured credit union is one of the safest places to keep cash, up to $250,000 per ownership category. Look up the institution yourself, and count everything you hold there toward the limit.

What a CD won’t do is show up on your credit report. Savings and credit are separate records, and no amount of saving builds one from the other — a lender looking at your file sees what you’ve borrowed and repaid, not what you’ve put away.

The Kikoff Credit Account takes no deposit, so nothing gets tied up, and it reports your on-time payments to all three credit bureaus. No credit check to sign up, and plans start at $5 a month.