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

An online savings account gets the same FDIC protection as a savings account at a brick-and-mortar bank, as long as the bank itself is FDIC insured. The fact that you access it through a website or app does not change the coverage. What matters is whether the institution holding your money is a member of the FDIC system.

Most online banks are FDIC members. The major ones—Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank—all carry FDIC insurance. But not every online financial institution does. Some online lenders and fintech platforms hold deposits but are not banks and do not carry FDIC coverage. You need to verify the specific institution, not assume based on the name or how modern it looks.

The coverage limit is the same across all FDIC banks: $250,000 per depositor, per bank, per account category. If you have $300,000 in a savings account at an FDIC bank, the FDIC covers $250,000. The remaining $100,000 is uninsured. If you have $250,000 in a savings account and $250,000 in a money market account at the same bank, both are covered separately because they are different account categories.

Key Takeaways

  • Online savings accounts held at FDIC-insured banks receive the same $250,000 per account category protection as in-person accounts.
  • Not all online financial companies are FDIC insured; you must check whether the specific institution is a bank and an FDIC member.
  • The FDIC website has a tool called BankFind that shows you when ready whether a specific bank carries insurance and what your coverage is.
  • If you have more than $250,000 to save, you can spread deposits across multiple banks or use different account categories at the same bank to protect all of it.

How to verify your online bank is FDIC insured

The fastest way is to use the FDIC BankFind tool on the FDIC website. Type in the name of the bank and it will tell you whether it is insured, what its insurance certificate number is, and which branch locations are covered. This takes 30 seconds and removes all guesswork.

If you cannot find the bank in BankFind, it is not FDIC insured. Some online platforms call themselves banks but are not chartered as banks and therefore do not carry FDIC coverage. For example, some fintech savings platforms partner with an FDIC bank to hold the money, but the platform itself is not insured—the underlying bank is. In those cases, BankFind will show the partner bank's name, not the fintech platform's name.

You can also look at the bank's own website. FDIC-insured banks are required to display FDIC insurance information somewhere on their site, usually in the footer or in a "Security" or "About Us" section. They will state their FDIC certificate number. If you see no mention of FDIC insurance anywhere on the site, that is a red flag.

What happens to your money if the bank fails

If an FDIC-insured bank fails, the FDIC steps in as the receiver. You do not lose access to your money. The FDIC either arranges for another bank to take over the failed bank's deposits (and you keep your account there) or it pays you directly up to the $250,000 limit within a few business days.

This has happened dozens of times. During the 2008 financial crisis, the FDIC managed the failure of 140 banks. Depositors with balances under $250,000 were made whole. Depositors with balances above $250,000 lost the amount over the limit. The FDIC has never failed to cover insured deposits since the program began in 1933.

The speed of the payout depends on the method. If another bank assumes the deposits, you may not notice anything—your account straightforward moves to the new bank and you keep using it. If the FDIC pays you directly, it typically does so within two to three business days, though it can take longer if the bank's records are complex.

Account categories and how they affect your coverage

The FDIC insures by account category, not by account number. This means you can have multiple accounts at the same bank and be fully covered if they fall into different categories. The main categories are:

  • Single accounts (savings, checking, money market in your name alone): $250,000 coverage
  • Joint accounts (accounts held with another person): $250,000 per person, so a joint account with two owners is covered up to $500,000 total
  • Retirement accounts (IRAs, Roth IRAs, SEP-IRAs): $250,000 coverage, separate from your single account coverage
  • Trust accounts (accounts held in trust for beneficiaries): $250,000 per beneficiary, up to five beneficiaries

Example: You have $250,000 in a savings account at Bank A (single account category). You also have $250,000 in a joint savings account at Bank A with your spouse. Both are fully covered because they are different categories. If you added a third account—a money market account in your name alone at the same bank—only $250,000 of the three accounts would be covered, because single accounts (savings, checking, money market) all count toward the same $250,000 limit.

Spreading deposits across multiple banks for higher coverage

If you have more than $250,000 to save, you can open accounts at different FDIC-insured banks and protect all of it. Each bank is a separate entity for FDIC purposes. A $250,000 deposit at Bank A and a $250,000 deposit at Bank B are both fully covered.

Many people use this strategy when they have substantial savings. You might keep $250,000 at an online bank with a high interest rate and another $250,000 at a different online bank. Both earn interest and both are insured. The trade-off is managing multiple accounts and tracking which bank holds which balance.

Some people use sweep accounts or deposit networks to automate this. These services move your money across multiple FDIC banks automatically to keep each account under the $250,000 limit. You see one login but your deposits are spread across several banks behind the scenes. This is useful if you have a very large balance and do not want to manage multiple logins yourself.

What online savings accounts do not cover

FDIC insurance covers the balance in your account—the dollars themselves. It does not cover investment losses, fraud, or theft. If you buy stocks, bonds, or mutual funds through an online brokerage, those are not FDIC insured. If someone steals your login credentials and transfers money out, the FDIC does not reimburse you (though your bank may, depending on its fraud policy).

FDIC insurance also does not cover money held outside the United States. If you have an account at a U.S. bank but the funds are held in a foreign branch, coverage may not explore. This is rare for consumer savings accounts but matters if you use international banking services.

Interest earned on your account is covered as part of your balance. If you have $240,000 in a savings account and earn $5,000 in interest before the bank fails, the full $245,000 is covered.

Online banks with high interest rates and FDIC insurance

Many people choose online savings accounts specifically because they offer higher interest rates than traditional banks, and they want to confirm those accounts are still insured. The good news: the major online banks offering competitive rates are all FDIC insured. Marcus, Ally, American Express Personal Savings, Discover, and Synchrony Bank all carry FDIC coverage.

The higher rates are possible because online banks have lower overhead costs—no physical branches, smaller staff. They pass some of that savings to depositors through better interest rates. The FDIC insurance is identical to what you would get at a bank with 500 branches. You are not trading safety for yield.

Before opening an account, use BankFind to confirm the specific bank is insured. Interest rates change frequently, so do not assume a bank is insured just because it is well-known or has good reviews. Verification takes one minute and removes all doubt.

Frequently Asked Questions

If I have $500,000 and split it between two online banks, is all of it insured?

Yes. Each bank is a separate FDIC entity. $250,000 at Bank A and $250,000 at Bank B are both fully covered. You would need to open accounts at two different FDIC-insured banks and keep the balances separate.

Does FDIC insurance cover my online savings account if I access it from another country?

Yes, as long as the bank is FDIC insured and the account is held in the United States. Where you log in from does not matter. The location of the bank and the account is what determines coverage.

What if my online bank is bought by another bank?

Your coverage continues. The acquiring bank becomes the new FDIC member and your deposits remain insured. You may be moved to the new bank's systems, but your balance and coverage do not change. This happened when JPMorgan Chase acquired First Republic Bank in 2023—depositors' accounts transferred and remained insured.

Are savings accounts at credit unions FDIC insured?

No. Credit unions are insured by the National Credit Union Administration (NCUA), not the FDIC. NCUA coverage is similar—$250,000 per account category—but it is a separate system. If you have accounts at both a bank and a credit union, each is insured by its own agency.

Can I lose FDIC coverage if I do not use my account for a long time?

No. Inactivity does not affect your coverage. Your balance remains insured whether you log in monthly or once a year. Some banks may close inactive accounts after a set period, but that is a bank policy, not an FDIC rule.