How FDIC Insurance Works

I’ve received more than a few concerned emails & DM’s over the last week all related to the SVB failure.

So here’s a layman’s breakdown of how FDIC insurance works (and doesn’t work). 

You get $250,000 of FDIC insurance PER bank PER “Account Ownership Category”.

What the heck is an account ownership category? 

There are 14 of them, but for our Financial Zen community only these would likely apply: 

• Single (one owner)
• Joint (two owners)
• Revocable Trusts
• Retirement accounts (IRAs)

So you and your spouse could have up to $1M in coverage in taxable accounts:

• 1 individual account for you ($250k)
• 1 individual account for your spouse ($250k) 
• 1 joint account ($250k)
• 1 trust account ($250k)

One question I received multiple times is if a checking account and a savings account both get $250k.

The answer is NO. For instance, if you have a joint checking and joint savings account, you’re only insured for $250k.

In other words the TYPE of account doesn’t matter, only WHO owns it (i.e. the account ownership category).

So there ya go. Everything you never thought want to know about FDIC insurance. 

If you have more questions, let me know.