Is an Online Savings Account FDIC Insured?

The Federal Deposit Insurance Corporation (FDIC) insures online savings accounts and brick-and-mortar banks. If the bank has FDIC insurance and fails, up to $250,000 per account holder per account type is protected. That means couples could keep up to $500,000 in a single bank account, and it would be protected. How do you know if your online bank account is FDIC insured? Read on to answer the question, "Is an online savings account FDIC insured?" for your accounts.

How Does FDIC Insurance Work for an Online Savings Account? 

The FDIC provides insurance for online and physical banks. Your bank doesn’t need a brick-and-mortar location for online savings accounts to qualify for FDIC insurance. 

According to the FDIC, standard deposit insurance covers $250,000 per depositor, per insured bank, for each account ownership category. That means that couples who share a savings account are covered up to $500,000, as long as both names are on the account. And if you have two online savings accounts with different banks, each is insured for up to $250,000. 

Steps for Ensuring Your Online Savings Account Is FDIC Insured

Follow the steps here to help determine whether your bank is FDIC insured so that your online savings accounts are protected. 

Step 1: Visit the Official Website of The Bank

Most banks will display FDIC insurance certification directly on their website. As a first step, open a web browser and enter the bank's official website URL. 

Step 2: Look for FDIC Signage or Disclosures

Then, look at the bank's website and search for visible signs, logos or statements indicating FDIC insurance coverage. On most banks, you’ll see the words Member FDIC towards the bottom of the page. If you don’t see it, do a word search on the page for FDIC. 

Other offerings from the bank, like credit cards or investment accounts, aren’t FDIC insured, but the savings and checking products should say Member FDIC.

Step 3: Locate the FDIC Certificate Number

You can then explore the bank's website and locate the unique FDIC certificate number associated with the bank's FDIC membership. If you don’t see it, you can also enter “bank name” FDIC insurance number into a search engine, and it should come up right away. 

Step 4: Use the FDIC's BankFind Tool

If you have difficulty locating the FDIC insurance number, you can also locate or verify the FDIC insurance number with the FDIC’s BankFind Suite. Enter the bank's name or location to obtain detailed information about the bank's FDIC insurance coverage.

Step 5: Confirm the Insurance Coverage Limit

Be sure to confirm the insurance coverage limit provided by the FDIC. For example, the FDIC may consider a checking account and a savings account at the same bank as the same category of individual accounts. In that case, the coverage limit for both accounts is $250,000 with a single account holder. 

Step 6: Consider Contacting the Bank Directly

If in doubt, or if you have further questions or concerns about the FDIC insurance coverage for an online savings account, contact the bank directly. The bank can provide detailed information about FDIC insurance and its FDIC membership number. 

Pros of FDIC Insurance Coverage for Online Savings

Inspired by banking runs in the 1920s, FDIC insurance was enacted 90 years ago, on June 16, 1933, for the purpose of maintaining stability and public confidence in banks and financial institutions. Since then individuals and the U.S. economy have enjoyed greater stability.

There are major advantages to FDIC insurance on online savings accounts, including:

• Guaranteed protection of savings
• Banking stability, even in the case of bank failure
• A risk-free way for consumers to store money
• Improvement of economic stability by increasing consumer confidence in banks and online savings accounts

What Types of Accounts Are Generally not Covered by FDIC?

While online savings and checking accounts are FDIC-insured, FDIC insurance typically does not cover other financial products. FDIC insurance is designed to offer consumers a stable, risk-free way to store funds and does not guarantee more speculative or high-risk options. Investments, speculative products or credit cards, for example, aren't FDIC insured. Types of accounts not covered by FDIC insurance include the following types of investments.

Investment Products

FDIC insurance does not cover investment products such as stocks, bonds, mutual funds, exchange-traded funds and annuities because they are subject to market risks and fluctuations. Investors are assuming the inherent risk by choosing these investment products. 

Insurance Products

Insurance policies, including life insurance, health insurance, property insurance, and annuities, are not FDIC insured. 

Securities

Like investment products, FDIC insurance does not cover securities like stocks, bonds and Treasury securities. They have inherent risks and are subject to market volatility. 

Safe Deposit Boxes

FDIC insurance specifically applies to deposits in insured banks, not physical items stored in safe deposit boxes. Unfortunately, that means that if you're storing valuable items, including cash, checks, gold, jewelry or other valuables, FDIC insurance will not protect them if damaged or stolen.  

Foreign Deposits

Deposits held in foreign branches of U.S. banks or deposits held in foreign banks are generally not FDIC insured. However, foreign banks may be covered by comparable insurance in their country. Check with the foreign bank to understand any insurance coverage. 

Virtual Currencies

The FDIC does not insure virtual currencies like Bitcoin and other cryptocurrencies. Cryptocurrencies are subject to high market volatility, making them speculative investments rather than savings vehicles.  

FDIC-Insured Online Banks

With the shift towards digital banking, online banks are subject to the same regulations and insurance as brick-and-mortar banks. That means the best online savings accounts should offer the same protection as a physical bank with added convenience and lower fees. While most online savings accounts are FDIC insured, it's important to confirm your bank's coverage before opening any type of online savings account. Beyond FDIC insurance, find other features to look for in an online savings account here.

Frequently Asked Questions