Yes. A certificate of deposit at an FDIC-insured bank is a deposit, and the FDIC lists time deposits "such as certificates of deposit (CDs)" among the products it covers. The coverage is $250,000 per depositor, per insured bank, per ownership category, and it includes both the principal and any interest accrued through the day the bank closes. Since the FDIC was founded in 1933, no depositor has lost a penny of FDIC-insured funds, and the fund behind the promise is backed by the full faith and credit of the United States government.
That is the answer. The rest of this page is about the phrase in bold, because every one of its four parts is a place where coverage quietly goes missing — and about what actually happens to a certificate on the day a bank fails, which is not what most people picture.
What "per depositor, per bank, per ownership category" protects
Per depositor. The limit is yours, not the account's. Two certificates in your sole name at the same bank are added together and insured to $250,000 in total, not $250,000 each.
Per insured bank. The limit applies at each separately chartered bank. Certificates at two different banks are insured separately. Certificates at two brands that share one charter are not — they are one bank for insurance purposes, however different the websites look. Online banks for high-yield savings explains how to check a charter with the FDIC's BankFind tool; it is a one-minute check and the most consequential one on this page for anyone holding more than $250,000.
Per ownership category. Deposits held in different categories at the same bank are insured separately, which is the legitimate way to hold more than $250,000 at one institution. The categories the FDIC recognises include single accounts, joint accounts, certain retirement accounts, trust accounts, employee benefit plan accounts, business accounts and government accounts. The three that matter for a household's certificates:
| Category | How it is insured |
|---|---|
| Single | All your sole-name deposits at the bank, added together, to $250,000 |
| Joint | Each co-owner's share, to $250,000 — the FDIC assumes shares are equal unless the records say otherwise, so two co-owners are covered to $500,000 |
| Trust, including payable-on-death | Since April 1, 2024: $250,000 per unique eligible beneficiary, up to five beneficiaries, a maximum of $1,250,000 per owner per bank |
Certain retirement accounts — an IRA certificate, for example — are their own category, insured to $250,000 in aggregate per person per bank. Couples and money covers what joint ownership means beyond insurance, which is worth reading before opening a joint certificate purely for coverage.
The FDIC publishes an online estimator, EDIE, that applies these rules to your actual accounts. Use it rather than a comparison site's summary, including this one, for any balance near the limit.
What happens to a CD the day a bank fails
This is the part people have not seen, and it is more orderly than the word "failure" suggests.
When a regulator closes a bank, the FDIC steps in as receiver and resolves it one of two ways. Usually, another insured bank buys the failed bank's deposits — a purchase and assumption — and your accounts, certificates included, simply reopen at the acquiring bank, typically by the next business day. Less often, the FDIC pays out directly, by cheque or by opening an account for you at another insured bank, and historically it has done so within a few days of closing, usually the next business day.
Two rules govern what happens to a certificate in a purchase and assumption, and both are worth knowing in advance:
The acquiring bank may change the rate — and you may leave without penalty. In the FDIC's guidance to depositors of failed banks, the acquiring bank can re-set the terms on acquired deposits, and until you enter a new deposit agreement with it, you may withdraw from any transferred account without an early-withdrawal penalty. A certificate whose rate is cut by the new owner is a certificate you can walk away from for free.
Transferred certificates are separately insured for a while. If you already had deposits at the acquiring bank, the certificates that arrived from the failed bank are insured separately from them — until the earliest maturity date after a six-month grace period. After that, everything at the acquiring bank counts together against your limit, so a saver who used two banks precisely to stay under $250,000 at each can find themselves over it at one, with a deadline attached.
In a direct payout, interest stops accruing at the date of closing, and you are paid principal plus the interest accrued to that day, up to the limit. The certificate, as a contract, ends with the bank.
Money above the insured limit is not lost automatically; it becomes a claim against the failed bank's assets, paid as and when those assets are sold, and often only in part. It is not something to plan around.
Four ways coverage goes missing
1. Two brands, one charter
Covered above, and repeated because it is the trap that catches savers who have done everything else right. Coverage is per charter. Check the FDIC certificate number, not the logo.
2. Over the limit inside one category
A $200,000 certificate and a $100,000 savings account, both in your sole name at one bank, is $50,000 uninsured. Neither account is over the limit; the category is. The fix is a second ownership category or a second bank, decided before the money moves, and the jumbo page is where that decision belongs.
3. Brokered certificates whose paperwork is wrong
A certificate bought through a brokerage is usually held in the broker's name for its customers. Coverage passes through to you only if three conditions hold: the money is actually yours, the bank's records show the account is held on behalf of customers, and your identity and share are ascertainable from the bank's or the broker's records. The FDIC lists "brokers who offer brokered CDs" as exactly this kind of arrangement. If the conditions are not met, the deposit is insured to the broker — aggregated with everything else in the broker's name at that bank — and you are a creditor of the broker.
Two more things about brokered certificates. Your coverage is at the issuing bank, added to anything you hold there directly, so know which bank issued it; the SEC's guidance on certificates has made that point for years. And a "callable" certificate can be ended early by the issuing bank; the call date is not the maturity date, and a "one-year non-callable" label describes the call protection, not the term.
4. It was never a deposit
Not everything sold at a bank is a deposit, and the FDIC covers only deposits. Investment products bought at or through a bank — mutual funds, including money market mutual funds, annuities, life insurance, stocks and bonds, municipal securities, savings bonds, crypto assets, and the contents of a safe deposit box — are not FDIC-insured, however trusted the bank. A "market-linked CD" or a structured product with the word "certificate" in its name needs its insurance status read, not assumed.
Treasury bills, notes and bonds are the case people ask about most. They are not FDIC-insured — and they do not need to be, because they are direct obligations of the United States, backed by its full faith and credit with no limit at all. That is a different guarantee from deposit insurance, not a weaker one, and HYSA vs CD vs T-bills compares the two instruments on the things that actually differ: tax, liquidity and exit terms.
Credit union certificates are insured — by a different agency
A share certificate at a federally insured credit union is not FDIC-insured, because a credit union is not a bank. It is insured by the National Credit Union Administration through the National Credit Union Share Insurance Fund, at $250,000 per member, per insured credit union, per ownership category, backed by the full faith and credit of the United States. The protection is equivalent in strength and separate in every rule. Do not carry the FDIC's trust figures across, do not assume the categories match, and check the NCUA's own site rather than a bank-focused summary. The credit union certificate page covers the membership question and the check for the small number of credit unions that carry private, non-federal share insurance instead.
What the insurance does not do
It does not protect the rate. A certificate at a bank that fails may be re-priced by the acquirer, as above. It does not protect you from the early-withdrawal penalty at a healthy bank, which is a contract term and not an insurance matter — the penalty page prices it. And it does not protect against inflation, which is a reason to size certificates to dated needs rather than to hold decades of money in them; where to keep an emergency fund covers the sizing, and once it publishes, are high-yield savings accounts safe covers the same insurance questions for the account most people hold alongside their certificates.
A no-penalty CD is insured exactly as any other certificate. So is a jumbo one, to the same limit — which is the point of the jumbo page.
What to actually do
Confirm the bank is FDIC-insured and confirm which bank it is. BankFind, one minute. Look up the certificate number, not the brand name.
Add up everything you hold at that bank in each ownership category. Certificates, savings, checking. If a category is near $250,000, use EDIE before opening another certificate there.
Use ownership categories deliberately. Joint ownership and named beneficiaries raise the insured amount at one bank under the FDIC's own rules. Decide them at opening, and know that they have legal effects beyond insurance.
If a bank you use is acquired after a failure, diarise the six-month grace period. Your transferred certificates are separately insured until the first maturity after it; after that, everything at the new bank counts together.
If the acquirer cuts your certificate's rate, leave. You may withdraw without penalty until you sign a new agreement. Do not sign one by default.
For brokered certificates, know the issuing bank and read the call terms. Pass-through coverage depends on the records being right, and it counts against your limit at that bank alongside anything you hold there directly.
Never assume the word "certificate" means "deposit". Read the insurance line. If it says the product is not a deposit and not FDIC-insured, believe it.
Get the CentSheet Money Brief
Email me CentSheet weekly: practical money decisions, new calculators, and useful worksheets. Unsubscribe anytime.