FDIC Insurance Covers $100K Per Legal Entity Per Bank

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The FDIC insurance limit now covers $250,000 per depositor. (subject to ownership structures)

I received the following question after the reader saw my post about FDIC and NCUA deposit insurance:

Jim, I have an FDIC insurance question for you. Bank of America has a 4mo 5.10% high yield cd that I’d like to put my funds in. I have more than 100k, if I split it up between myself, my wife, and then we open one together, will I be covered by the fdic insurance? Thanks,

It sounds like there will be three ownership types on the CDs, you, your wife, and a joint ownership scenario and in that case I believe your CD’s will each be individually covered under FDIC insurance up to $100k.

If you instead purchase three different CDs as an individual and for some reason it were to become insolvent, a maximum of $100k would be insurance regardless of how many accounts you have. It’s the legal ownership that matters and each type gets up to $100k.

Now, take that advice for what it’s worth because I’m not a banker and my opinion is based on what I read off the FDIC website, which I may have inaccurately interpreted.

{ 8 comments, please add your thoughts now! }

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8 Responses to “FDIC Insurance Covers $100K Per Legal Entity Per Bank”

  1. amy says:

    Shouldn’t the total be less than $100,000 to allow for the interest it would
    earn? Maybe do no more than around $93-95,000? Just wondering…..

  2. Tim says:

    simple answer is yes: you have a $100k limit for each of your individual account and a $200k for a joint account. for a total of $400k at each bank.

    if you are doing it only for 4 months, i wouldn’t be worrying about FDIC insurance. If BAC goes under in 4 months, we are all seriously in deep doodoo.

    with that said, 5.1%APY isn’t much. you might be better off getting the tax benefit from doing t-bills, WAMU 5.5%APY 6 mo CD (must purchase online $1k-$250k), Chase 5.35%APY-5.45%APY 7mo CD ($10k min 5.35 or 5.45 depends on region) a higher yield savings account like igobanking at 5.3%APY, ING electric orange checking at 5.3%APY for $100k+

    with that much deposits, you should also be looking into premier or private banking, which also provides higher rates.

    Bank of America has premier bank for min deposit of $100k and private banking.

    citi gold account $100k deposits

    HSBC premier starts at $100k deposits

    chase platinum banking at $75k deposits

  3. Phil says:

    Also, for those who have more than $100,000 per individual to deposit, there is a nifty service for that as well over at the Certificate of Deposit Account Registry Service (CDARS). This is for those who wish to insure up to $30 million.

    This service works by breaking up your >$100,000 deposit into many different $100,000 deposits, thereby compounding the effects of conventional FDIC insurance for you.

    I have no idea about any further details as I am not personally in a position to use such a service (yet).


  4. MoneyNing says:

    Wow I can’t believe that there are people that would keep 100k+ in cash unless they are super wealthy since their overall asset portfolio must be very high!

    • Sadie says:

      Am definitely not super wealthy but in 2008 a friend and her spouse pulled out some stock monies and went to long term CDs.

      Following is one “dilemma” I have never seen mentioned nor had it ever occurred to me:

      Should a spouse pass away, what options are available? Two CD accounts with joint names – separate SS #’s, with $150,000 each & both CDs mature in 2015. If deceased spouse’s name is removed, then the CD must be re-issued at a much lesser rate. With $250,000 allowed per person, the surviving spouse is subject to risk of $50,000+ “not being FDIC insured”

      I suppose it is impossible to plan for everything!

  5. Anonymous says:

    CDARS is essentially a consolidation mechanism where a bank in the CDARS network will buy CDs in your name from other banks in the CDARS network. This does not mean that you will necessarily get the other bank’s best CD rates. The minimum order is $10k, so you need $100k for the initial entry into CDARS from a custodial bank and $10k for additional CD purchases. Moreover, CDs are purchased only once a week under CDARS. The service is the sole service of the Promontory Interfinancial Network bank consulting firm.

    You are paying for the convenience of CDARS consolidating your CDs at one bank. It isn’t optimal, as I wrote before, because you can do the same thing and get higher rates if you did it yourself. There are quite a few fees CDARS imposes on the banks, so although participating banks list “cd-level” rates they will be less on the whole. fees include “onboarding fees”, transaction fee, and account maintenance fees the banks have to pay.

    the major banks do not participate in CDARS, because they have high deposits already. CDARS focuses on local and regional banks. Smaller deposit banks can increase their net deposits and expand their deposit base by participating in CDARS, thus increase loan capacity.

    there is the risk CDARS, because it includes smaller banks. These banks can go under. Since you are going through a primary bank to get other CDs you might not be inclined to check the financial stability of the other bank. after all the CD is FDIC insured; however, the end game is that you want to make money, not break even on your principle. the other risk is how banks within the network balance the books. it is different and there is more supervision than what caused the S&L crisis, but there is still risk that some may want to do engage in misuse of the deposits.

    You can also do the same thing if you are invested in a large multibank holding company. That company can divide up your investment assets into their subsidiary banks in order to diversify your assets under several deposits to meet the $100k FDIC cap.

    Also jumbo-cd’s, although not FDIC insured for more than $100k, have less risk to loss, since jumbo-cd holders have higher priority and preference if a bank becomes insolvent.

  6. fdic insurance is 100k per depositor. so, if you have multiple account holders on a single account, you get 100k per account holder. the fdic has an online calculator that can help you drill down to the specifics:

  7. Anonymous says:

    Go to to read the current answer. The
    FDIC guarantee has changed to $250,000 until 2013. They consider each person’s social
    security number for the maximum coverage, not the number of different accounts. They offer a bunch of different scenarios to explain.

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