Yes, online savings accounts are FDIC insured if the bank holds the insurance

An online savings account at an FDIC-insured bank gets the same deposit protection as a brick-and-mortar account at that same bank. The FDIC does not care whether you access your money through a website, an app, or a teller window. What matters is whether the institution holding your money is an FDIC member.

Most online banks are FDIC insured. The major ones—Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, Charles Schwab Bank—all carry FDIC insurance. But not all online financial companies do. Some online platforms that look like banks are actually brokerages, investment firms, or money transfer services, and those are not covered by FDIC insurance at all.

The protection works the same way regardless of where the bank is located or how you opened the account. Your deposits are insured up to the standard limit, which is currently $250,000 per depositor, per insured bank, per ownership category.

Key Takeaways

  • FDIC insurance covers online savings accounts at FDIC member banks, and most major online banks carry this insurance.
  • The FDIC insures deposits based on the bank itself, not the platform—so two accounts at the same FDIC bank count toward the same $250,000 limit.
  • You can verify whether an online bank is FDIC insured by searching the FDIC's BankFind tool using the bank's legal name.
  • Online-only platforms that are not banks—payment apps, investment platforms, cryptocurrency exchanges—do not carry FDIC insurance.
  • If an online bank fails, the FDIC typically makes insured funds available within a few business days, though the process is the same as for any other bank failure.

How to confirm your online bank is FDIC insured

Do not rely on the bank's website to tell you. Instead, use the FDIC's BankFind tool at bankfind.fdic.gov. Search by the bank's legal name—not the brand name. For example, Marcus by Goldman Sachs is legally "Marcus Bank," and Ally Bank is legally "Ally Bank." The search will show you the bank's FDIC certificate number and the date it became insured.

If the bank does not appear in BankFind, it is not FDIC insured. This is the only reliable way to check. Marketing materials and terms of service often claim insurance without actually holding it.

Some online platforms use FDIC-insured banks as custodians but are not themselves insured. For example, a robo-advisor or investment platform might hold your money at an FDIC bank, which means your cash deposits are protected, but your investments in stocks or mutual funds are not. The FDIC only insures deposits—checking, savings, money market accounts, and CDs. It does not insure securities, mutual funds, or stocks, even if they sit at an FDIC bank.

The $250,000 limit and how it applies to online accounts

The FDIC insures up to $250,000 per depositor, per insured bank, per ownership category. This means if you have a savings account and a checking account at the same FDIC bank, both accounts count toward the same $250,000 limit. You do not get $250,000 for each account.

The ownership category matters. If you hold an account in your name alone, that is one category. If you hold a joint account with another person, that is a separate category, and each owner is insured for up to $250,000. If you have a savings account in your name alone and a joint savings account with your spouse at the same bank, you are covered for $250,000 in your individual account and another $250,000 in the joint account.

Retirement accounts (IRAs, SEP-IRAs, and similar) are a separate category. So if you have a regular savings account and an IRA at the same FDIC bank, each is insured for up to $250,000 separately. Online banks do not change this calculation—the rules are identical whether the account is online or in person.

What happens if an online bank fails

If an FDIC-insured online bank fails, the FDIC takes over and protects your deposits the same way it would for any other bank. The process typically unfolds over a few days. The FDIC will close the bank, freeze accounts, and then either arrange for another bank to take over the deposits or pay out insured funds directly.

In most cases, you regain access to your insured deposits within one to three business days. The FDIC maintains a list of failed banks on its website, and you can check there to see the status of any bank you are concerned about. Since 2008, bank failures have been rare, and FDIC payouts have been routine and reliable.

Your uninsured deposits—anything above $250,000 in a single ownership category at that bank—are not protected by the FDIC. Those funds become part of the bank's estate and are distributed to creditors after insured deposits are paid. This is why people with large sums often split deposits across multiple FDIC banks or use different ownership categories.

Online platforms that are not FDIC insured

Many online financial platforms look like banks but are not. Payment apps like PayPal, Venmo, and Square Cash are not banks and do not carry FDIC insurance. Money sitting in these apps is held at a bank (usually), but the app itself is not insured. If the app company fails, your money may be at risk depending on how it is held.

Cryptocurrency exchanges and digital asset platforms are not FDIC insured. Bitcoin, Ethereum, and other cryptocurrencies are not deposits and are not may be able to access for FDIC coverage, even if the exchange holds them at a bank. Robo-advisors and investment platforms that hold stocks or mutual funds are not FDIC insured for those securities, though cash held at their custodian bank may be.

Some online lenders and peer-to-peer lending platforms are not FDIC insured. If you lend money through a platform like Prosper or LendingClub, that money is not a deposit and is not protected by the FDIC. You are a creditor, not a depositor, and your return depends on the borrower repaying the loan.

Comparing FDIC coverage across multiple online banks

If you have more than $250,000 to save, you can spread it across multiple FDIC banks and keep all of it insured. Each bank is a separate entity for FDIC purposes. So $250,000 at Marcus, $250,000 at Ally, and $250,000 at Discover are all fully insured because they are three different banks.

You can also use different ownership categories at the same bank. A savings account in your name alone, a joint account with your spouse, and an IRA at the same bank are three separate categories, each insured for $250,000. This strategy works at online banks just as it does at traditional banks.

Some people use a service like InvestFDs or Connexus to manage deposits across multiple banks automatically, though this is not necessary. You can straightforward open accounts at different online banks on your own. The FDIC does not limit how many accounts you can have or how many banks you can use.

What the FDIC does not cover at online banks

The FDIC insures deposits only. It does not insure stocks, bonds, mutual funds, or any investment product, even if you buy them through an online bank's investment platform. It does not insure cryptocurrency, commodities, or precious metals. It does not insure safe deposit boxes or the contents of safe deposit boxes.

If an online bank offers investment services, those services are typically not FDIC insured. The bank itself may be insured, and your cash deposits at the bank are insured, but the investments are not. This is an important distinction because some online banks market themselves as all-in-one financial platforms and it is straightforward to assume everything is covered.

The FDIC also does not insure money held outside the United States. If an online bank holds deposits in a foreign branch or a foreign subsidiary, those deposits are not covered by FDIC insurance, even if the parent company is FDIC insured.

Frequently Asked Questions

Can I lose money in an FDIC-insured online bank?

You cannot lose money due to the bank failing—the FDIC covers that. But you can lose money if you make poor investment decisions through the bank's investment platform, or if you hold uninsured products like stocks or cryptocurrency. You can also lose money if you exceed the $250,000 limit in a single ownership category; the amount above the limit is not protected.

What if my online bank is not FDIC insured and it fails?

Your deposits are at risk. You become an unsecured creditor and may recover some or all of your money depending on the bank's assets and how creditors are prioritized. There is no may provide. This is why checking BankFind before opening an account is important.

Do I need to do anything to set up FDIC insurance on my online savings account?

No. If the bank is FDIC insured, your deposits are automatically covered up to the limit. You do not need to register, pay a fee, or take any action. The insurance is built into the account.

If I have $500,000 across two online banks, am I fully protected?

Yes, if each bank is FDIC insured and you have $250,000 or less at each one. Each bank is a separate entity for FDIC purposes, so you get $250,000 of coverage at each. If you had all $500,000 at one bank, only $250,000 would be insured.

Are online money market accounts FDIC insured?

Yes, if the bank is FDIC insured. Money market accounts are deposits and are covered the same way as savings accounts. The rate may be higher, but the insurance limit is the same: $250,000 per depositor, per bank, per ownership category.