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GOOD MORNING.
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THE LEAD
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Several bills in Congress this year would expand deposit insurance for some business accounts, but none has become law, so the standard limit protecting your savings is still $250,000, the same figure set in 2008.
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That number is often misunderstood, and the confusion cuts both ways. Some retirees spread money across five banks they do not need. Others keep far more than is insured in one place without realizing it.
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Here is how coverage works. The FDIC insures deposits up to $250,000 per depositor, per insured bank, per ownership category. Each piece matters.
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This man just got inside a Cybercab, Elon Musk’s new car that has no steering wheel or pedals.
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What happens next will shock everyone.
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Per depositor means each person counts separately. Per bank means each insured bank has its own limit, but two brand names owned by the same bank share one limit. Per ownership category is where most people leave protection unused.
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The main categories for retirees are:
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Single accounts in your name alone: $250,000.
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Joint accounts: $250,000 for each owner, or $500,000 for a married couple.
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Certain retirement accounts, such as an IRA held in bank CDs: a separate $250,000.
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Trust accounts, including payable on death accounts: up to $250,000 per named beneficiary, capped at $1.25 million per owner at each bank.
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Just as important is what the FDIC does not cover. Stocks, bonds, mutual funds, annuities and money market mutual funds are not insured, even if you bought them at your bank. A money market deposit account at a bank is covered. A money market fund at a brokerage is not. The names sound nearly identical, but the protection is very different.
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Why does this matter now? Many retirees are holding more cash than they did a few years ago, because savings and CD rates have been attractive. Selling a home or rolling over a pension can push a balance past the limit overnight.
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Bank failures are rare. Since the FDIC opened in 1934, no depositor has lost a penny of insured money. Uninsured money is another story. In 2023, regulators chose to protect uninsured depositors at two failed banks, but that was an emergency decision, not a promise. Recovering uninsured funds can take time and may not be complete.
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The practical takeaway: make a simple list of every bank account, the bank's legal name, the ownership type and the balance. If any one bank holds more than your coverage, use the FDIC's free estimator, called EDIE, at fdic.gov, or ask your banker to walk through your coverage. Close any gap by changing ownership categories, adding beneficiaries or moving the excess to a second bank.
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THE NUMBER THAT MATTERS
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$1.5 million
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A Couple’s Insured Limit at One Bank, No Trust Needed
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That is how much a married couple can have fully insured at a single bank, with no special products and no trust.
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Here is the math. Each spouse can hold a single account up to $250,000, which adds up to $500,000. Together they can hold a joint account up to $500,000. Each spouse can also hold an IRA in bank CDs up to $250,000, another $500,000. That totals $1.5 million at one bank. Naming payable on death beneficiaries can raise coverage further.
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Why it matters: many couples assume $250,000 is their total limit. They open accounts at banks they do not like, just to stay covered, and end up juggling extra statements and passwords. Knowing the categories can let you keep fewer banks and stay fully protected.
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One caution. Balances in the same category at the same bank add together. Your checking, savings and CDs in your own name all count toward one $250,000 limit at that bank.
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A Lower Stock Price Can Raise Big Questions
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Visit our official YouTube channel, The Patriot Investor, to watch the discussion, explore more videos, and subscribe.
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WHAT WE’RE WATCHING THIS WEEK
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INFLATION DATA
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BROKERAGE CASH: Your Brokerage Cash Follows Different Rules
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Cash in a brokerage account is usually protected by SIPC, not the FDIC. SIPC covers up to $500,000 per customer, including up to $250,000 in cash, if a brokerage firm fails and customer assets are missing. It does not protect against market losses. Many firms also sweep idle cash into partner banks, where FDIC coverage applies. But if you already bank at one of those partner banks, the two balances count together toward the same $250,000 limit. Also check what your sweep account pays. Some pay far less than a money market fund at the same firm. Your statement or the firm's website should list the partner banks and the rate.
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SMART MONEY SIGNAL
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BANK MERGERS: When Two of Your Banks Become One
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Mergers are common among regional and community banks. When two banks where you keep money combine, your extra coverage does not vanish overnight. The FDIC keeps deposits from the acquired bank separately insured for six months after the merger. CDs opened at the acquired bank generally keep separate coverage until they mature. After that, everything counts under one limit. Merger notices are easy to toss out with junk mail, so read them closely. Use the grace period to move any money that would push you over the limit at the combined bank.
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WORTH KNOWING
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PAYMENT APPS: A Payment App Is Not a Bank
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Money sitting in a payment or investing app may be held at a partner bank, but that does not mean it is fully protected. FDIC insurance covers the failure of an insured bank. It does not cover the failure of the app company that keeps track of who owns what. In 2024, customers of several financial apps lost access to their money for months after a middleman technology firm called Synapse went bankrupt. If you use an app to send money to family, move the balance to your insured bank account instead of letting it sit. Check the app's terms to see which bank holds the funds.
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The FDIC limit is $250,000 per person, per bank, per ownership category, and that last part is where extra protection lives. Investment products are not covered, even when you buy them at a bank. List your accounts, add up each bank's total and move anything over the limit.
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