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Is the money in your bank account safe? Here’s what to know if you’re worried about your deposits

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Why your bank deposits are safe and how the FDIC insurance limit works

Nearly all banks are covered by the FDIC and FDIC protection applies to a wide range of deposit accounts, including:

  • Checking accounts
  • Savings accounts
  • Money market deposit accounts
  • Certificates of deposit (CD)
  • Prepaid cards (assuming certain FDIC requirements are met)
  • Cashier’s checks, money orders and other official items issued by a bank
  • Negotiable order of withdrawal (NOW) accounts

Where it can be a bit confusing is that the FDIC’s coverage limit is $250,000 per person, per bank and per account type. But a checking account and savings account won’t necessarily be in different categories. Here’s how the FDIC classifies accounts:

FDIC deposit insurance coverage limits

Type of account owner category Coverage limit
Single accounts $250,000 per owner
Joint accounts $250,000 per co-owner
Certain retirement accounts $250,000 per owner
Revocable trusts $250,000 per owner per unique beneficiary
Corporation, partnership and unincorporated association $250,000 per corporation, partnership or unincorporated association
Irrevocable trusts $250,000 per unique beneficiary that’s entitled to the account
Employee benefit plans $250,000 per plan participant that’s entitled to the account
Government accounts $250,000 per official custodian (more coverage may be available)

As an example, if you had a $100,000 CD and $175,000 in a savings account at the same bank and both accounts were only under your name, that combined total ($275,000) would be insured for $250,000. However, if you had a joint savings account, then the savings account balance would fall under a different category.

If you have more than $250,000 in deposit accounts, one way to protect the money is to deposit it in different account categories or to open accounts with different banks. As you’re shopping around for a deposit account, you can find out if a bank is insured with the FDIC’s BankFind tool. It’s also a good idea to open checking accounts or savings accounts with no monthly maintenance fees and the highest interest rate you can find.

Below are a few of the best deposit accounts with FDIC insurance, according to CNBC Select’s rankings:

Ally Interest Checking Account

Ally Bank is a Member FDIC.

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  • Monthly maintenance fee

  • Minimum deposit to open

  • Minimum balance

  • Annual Percentage Yield (APY)

    0.10% less than $15,000 minimum daily balance; 0.25% over $15,000 minimum daily balance

  • Free ATM network

  • ATM fee reimbursement

    Up to $10 per statement cycle

  • Overdraft fee

  • Mobile check deposit

Capital One 360 Checking®

Capital One Bank is a Member FDIC.

  • Monthly maintenance fee

  • Minimum deposit to open

  • Minimum balance

  • Annual Percentage Yield (APY)

  • Free ATM network

    70,000+ Capital One®, MoneyPass and Allpoint® ATMs

  • ATM fee reimbursement

  • Overdraft fee

    $35 if you opt-in to Next Day Grace

  • Mobile check deposit

LendingClub High-Yield Savings

LendingClub Bank, N.A., Member FDIC

  • Annual Percentage Yield (APY)

  • Minimum balance

    No minimum balance requirement after $100.00 to open the account

  • Monthly fee

  • Maximum transactions

  • Excessive transactions fee

  • Overdraft fees

  • Offer checking account?

  • Offer ATM card?

Marcus by Goldman Sachs High Yield Online Savings

Goldman Sachs Bank USA is a Member FDIC.

  • Annual Percentage Yield (APY)

  • Minimum balance

    None to open; $1 to earn interest

  • Monthly fee

  • Maximum transactions

    At this time, there is no limit to the number of withdrawals or transfers you can make from your online savings account.

  • Excessive transactions fee

  • Overdraft fees

  • Offer checking account?

  • Offer ATM card?

What types of accounts aren’t covered by the FDIC insurance limit?

Balances above the FDIC’s insurance limit and investments that are not “deposit products” won’t qualify for FDIC protection, this includes:

  • Stocks
  • Bonds
  • Mutual funds
  • Crypto assets
  • Life insurance policies
  • Annuities
  • Municipal securities
  • Safe deposit boxes or their contents
  • U.S. Treasury bills, bonds or notes (these investments are backed by the full faith and credit of the U.S. government)

Bottom line

The FDIC insures deposit accounts up to $250,000 per owner, per bank and per account category. Most banks are protected by the FDIC, so there’s no need to panic and withdraw money that is protected. To calm fears, the federal government has gone a step further and ensured that depositors at the banks that recently failed will have full access to their money.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

Source: CNBC

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