Bank Safety FAQ

Question 1

How much does FDIC insurance cover?

Accepted Answer

$250,000 per depositor, per insured bank, per ownership category. Because of that third dimension, one household at one bank can be insured well beyond $250,000 — a married couple with two single accounts and one joint account is covered for $1,000,000.

Question 2

Is FDIC insurance per account or per person?

Accepted Answer

Per depositor, per bank, per ownership category — not per account. Opening five savings accounts at the same bank in your own name gives you one combined $250,000 limit, not five. Adding a different ownership category, or a different bank, is what adds coverage.

Question 3

What are the FDIC ownership categories?

Accepted Answer

The main ones are single accounts, joint accounts, certain retirement accounts such as IRAs, trust accounts, employee benefit plan accounts, business accounts for corporations and partnerships, and government accounts. Each category gets its own $250,000 limit at the same bank.

Question 4

How do I insure more than $250,000?

Accepted Answer

Three levers: use additional ownership categories at the same bank, spread the money across separate FDIC-insured banks, or use a deposit network that distributes your balance across many insured institutions through one relationship. All three are ordinary and widely used.

Question 5

How much is a joint account insured for?

Accepted Answer

$250,000 per co-owner, so a two-person joint account is insured to $500,000 — and that sits on top of each owner's separate single-account coverage at the same bank. All co-owners must have equal withdrawal rights for the account to qualify.

Question 6

Are trust accounts insured differently?

Accepted Answer

Yes. Since the FDIC's trust rule took effect on April 1, 2024, revocable and irrevocable trusts are treated as one combined category: $250,000 per beneficiary, up to five beneficiaries, for a maximum of $1,250,000 per owner per bank.

Question 7

What does FDIC insurance NOT cover?

Accepted Answer

Only deposits are covered. Stocks, bonds, mutual funds, money market funds, annuities, life insurance, crypto assets, and the contents of a safe deposit box are not FDIC-insured, even when you bought them through your bank. Checking, savings, money market deposit accounts, CDs, and official items like cashier's checks are covered.

Question 8

Do I have to apply for FDIC insurance?

Accepted Answer

No. Coverage is automatic the moment you open a deposit account at an FDIC-insured bank. There is no sign-up, no fee to you, and no paperwork — banks fund the insurance fund through assessments they pay themselves.

Question 9

Is my money at a fintech app FDIC-insured?

Accepted Answer

Not always in the way the marketing implies. Many apps are not banks; they hold your balance at a partner bank, and pass-through insurance protects you if that partner bank fails — not if the app or an intermediary fails or its records are wrong. Find out which chartered bank actually holds the money and confirm that bank is insured.

Question 10

Is my money safe in the bank?

Accepted Answer

For most people, yes. If your bank is FDIC-insured and your balances sit within the coverage limits, your deposits are backed by the full faith and credit of the United States. No depositor has lost a penny of insured funds since the FDIC began operating in 1934.

Question 11

What happens if my bank fails?

Accepted Answer

The FDIC steps in as receiver, usually on a Friday, and typically has insured deposits available by the next business day — most often by transferring your account to a healthy acquiring bank. You generally keep your account number, your debit card keeps working, and you take no action.

Question 12

How long does it take to get my money after a bank failure?

Accepted Answer

Historically the next business day for insured deposits. The FDIC's stated aim is to make insured funds available as soon as possible after a bank closes, and in the great majority of failures the accounts simply reopen at the acquiring institution.

Question 13

What happens to money above the $250,000 limit?

Accepted Answer

You become an unsecured creditor of the failed bank and receive a receivership certificate. The FDIC pays dividends on that claim as it sells the failed bank's assets, so you may recover some, most, or occasionally all of it — but it is not guaranteed and it is not fast.

Question 14

How many banks fail each year?

Accepted Answer

Usually very few — in many recent years, zero or a small handful. Failures cluster around stress: hundreds during the 2008-2012 period, then long stretches with none. The FDIC publishes a complete failed-bank list going back decades.

Question 15

What happened to the banks that failed in 2023?

Accepted Answer

Silicon Valley Bank was closed on March 10, 2023 with roughly $209 billion in assets, Signature Bank two days later, and First Republic Bank on May 1, 2023 with roughly $229 billion. All three had concentrated, heavily uninsured deposit bases that moved within days once confidence broke.

Question 16

Are big banks safer than small banks?

Accepted Answer

Not for your insured deposits — coverage is identical at a trillion-dollar bank and a single-branch community bank. Size brings diversification and heavier supervision, but the 2023 failures were mid-size institutions, and a well-capitalized community bank can be perfectly sound.

Question 17

Are online banks safe?

Accepted Answer

Yes, when they are FDIC-insured — the charter matters, not the building. An online-only bank with an FDIC certificate protects your deposits exactly like a branch on Main Street. The thing to verify is that the entity holding your money is itself an insured institution.

Question 18

How do I check if my bank is FDIC-insured?

Accepted Answer

Look it up by name and confirm it has an FDIC certificate number. Every bank profile on BankSonar is keyed on that certificate number and pulled from the FDIC's own public database, and the FDIC runs its own BankFind lookup as well.

Question 19

Are credit unions insured like banks?

Accepted Answer

Yes, by a different agency. Federally insured credit unions are covered by the NCUA through the National Credit Union Share Insurance Fund, for $250,000 per share owner, per credit union, per ownership category — the same limit and the same US government backing as FDIC coverage.

Question 20

Is NCUA insurance as good as FDIC insurance?

Accepted Answer

Functionally identical for a saver. Both are independent federal agencies, both carry the full faith and credit of the United States, and both cover $250,000 per depositor, per institution, per ownership category. The difference is which institutions they cover, not how strong the protection is.

Question 21

Should I use a credit union or a bank?

Accepted Answer

It depends on what you want, not on safety — insured deposits are equally protected at both. Credit unions are member-owned nonprofits that often return value through better rates and lower fees; banks typically offer wider branch networks, broader product ranges, and more mature technology.

Question 22

Can I have $250,000 at a bank and $250,000 at a credit union?

Accepted Answer

Yes, and both are fully insured. The limits are separate because they are different institutions backed by different federal funds. Combining FDIC and NCUA coverage is a normal way to protect a larger balance.

Question 23

Are all credit unions federally insured?

Accepted Answer

Most, but not all. The large majority of US credit unions are federally insured by the NCUA; a small number carry private deposit insurance that is not backed by the US government. Look for the words 'federally insured by NCUA' and verify with the NCUA's own lookup tool.

Question 24

Why do credit unions call accounts 'shares'?

Accepted Answer

Because members are owners, not customers. A share savings account is savings, a share draft account is checking, and a share certificate is the credit-union equivalent of a CD. The vocabulary differs; the insurance does not.

Question 25

What is the Sonar Score?

Accepted Answer

An informational 0-100 signal computed from four public FDIC call-report figures: tier-1 risk-based capital ratio, return on assets, return on equity, and total assets. It summarizes a bank's reported financial condition in one readable number. It is not a credit rating, an endorsement, or advice.

Question 26

What is a good bank health score?

Accepted Answer

On our scale, 80 and above is Strong, 65-79 is Stable, 50-64 is Watch, and below 50 is Caution. Treat a low band as a prompt to read the underlying capital and earnings figures, not as a prediction of failure.

Question 27

Where does BankSonar's data come from?

Accepted Answer

The FDIC BankFind Suite API at api.fdic.gov/banks — the same free, public, key-less dataset the FDIC publishes from quarterly call reports. We add no proprietary data, which means anyone can reproduce every figure we show.

Question 28

How do I verify BankSonar's numbers myself?

Accepted Answer

Take the FDIC certificate number from the bank's URL on this site, query the same fields directly from the FDIC API, and compare. Remember that FDIC monetary fields are reported in thousands of dollars — an ASSET value of 3,395,000 means about $3.4 billion.

Question 29

How current is the data on this site?

Accepted Answer

It is as current as the FDIC's quarterly cycle allows. Banks generally file within 30 days of each quarter end, so the newest published figures typically describe a quarter that closed one to three months ago. Every bank profile shows its reporting date.

Question 30

Does a low health score mean my money is at risk?

Accepted Answer

No. A score has no effect on deposit insurance — insured funds up to $250,000 per depositor, per bank, per ownership category are protected regardless of any number we or anyone else publishes. A low score is a reason to look closer, not a reason to panic.

Question 31

What does the Sonar Score miss?

Accepted Answer

Everything that is not in a quarterly public filing: deposit concentration, how much of the deposit base is uninsured, real-time liquidity, and confidential supervisory findings. Those were decisive in the 2023 failures, which is why no public score should be read as a guarantee.

Question 32

Is the Sonar Score a credit rating?

Accepted Answer

No. It is not issued by a nationally recognized statistical rating organization, it is not an opinion on any security, and it must not be used as one. It is an informational summary of public financial data, published for consumers.

Question 33

How do I compare two banks?

Accepted Answer

Put them side by side on the same public metrics rather than judging either in isolation. Capital ratio, profitability, deposit base, and branch footprint tell you more than a marketing page does.

Question 34

How do I switch banks without missing a payment?

Accepted Answer

Open the new account first, move direct deposits and confirm one full cycle has landed, then move automatic payments one at a time, and only close the old account after two clean statement cycles. Closing first is how people get hit with overdrafts.

Question 35

How long should I leave my old account open?

Accepted Answer

At least two full statement cycles after the last automatic payment has moved. Annual and quarterly charges are the ones that catch people out, so keep a small buffer balance until you have seen a complete cycle with no activity.

Question 36

What is a routing number?

Accepted Answer

A nine-digit ABA number that identifies your bank in the US payments system, printed at the bottom left of a check. Many banks use different routing numbers for wires versus ACH transfers, so use the one your bank specifies for the transaction type.

Question 37

How do I find my bank's routing number?

Accepted Answer

Check the bottom left of a paper check, your online banking account details page, or your bank's routing number lookup. Confirm it with the bank before sending a wire — a wrong routing number sends money to the wrong institution.

Question 38

Which are the largest banks in the US?

Accepted Answer

The largest by total assets are the universal banks and major dealers, led by JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo. Rankings shift with mergers and balance-sheet changes, so check current FDIC figures rather than an old list.

Question 39

Which banks have the highest health scores?

Accepted Answer

Scores move each quarter as new call reports land, so there is no permanent answer. We publish a live ranking built from the latest FDIC data, and it is worth reading alongside the caveat that a high score is context, not a guarantee.

Question 40

How do I find banks in my state?

Accepted Answer

Browse by state to see the institutions chartered or operating where you live, with their FDIC status and health signal. Local banks and credit unions often price deposits better than national brands.

Question 41

What is the difference between a CD, savings, and a money market account?

Accepted Answer

A CD fixes a rate for a fixed term and penalizes early withdrawal. A high-yield savings account pays a variable rate with no lock-up. A money market account is a variable-rate deposit account with check-writing or card access. All three are FDIC-insured deposits at an insured bank.

Question 42

Is a money market account the same as a money market fund?

Accepted Answer

No, and the distinction matters more than any rate. A money market deposit account at a bank is FDIC-insured. A money market fund at a brokerage is an SEC-registered mutual fund, is not FDIC-insured, and can lose value.

Question 43

What is APY and why does it differ from the interest rate?

Accepted Answer

APY is the annual yield including compounding, so it is slightly higher than the nominal rate. A nominal 5% compounded monthly is about 5.12% APY. US banks must disclose deposit yields as APY under the Truth in Savings Act, which is what makes two offers comparable.

Question 44

Why do some savings accounts pay so much more than others?

Accepted Answer

Mostly because of cost structure and strategy. Online banks without branch networks pass savings through to depositors, and banks actively seeking deposits price above those that are not. A big national brand paying a token rate is not mispriced — it simply does not need your deposit.

Question 45

How is a CD early-withdrawal penalty calculated?

Accepted Answer

Usually as a set number of months of interest on the amount withdrawn, disclosed before you open the account — so a six-month penalty costs roughly half a year's earnings on that money. If the CD has not yet earned that much, the penalty can come out of principal.

Question 46

What is a CD ladder?

Accepted Answer

Splitting one lump sum across CDs with staggered maturities so part of it comes free on a schedule. Split $50,000 into five $10,000 CDs at one through five years, roll each maturing rung into a new five-year, and after five years all of it earns long-term rates while $10,000 frees up annually.

Question 47

Should my emergency fund be in a CD?

Accepted Answer

Generally no. An emergency fund needs to be available on the day you need it, and a standard CD charges a penalty for exactly that. A high-yield savings account or money market account keeps it liquid; a no-penalty CD is the middle ground.

Question 48

Can my savings rate change after I open the account?

Accepted Answer

Yes. Savings and money market rates are variable and can change on any day without notice — a rate you saw when you opened the account is not a commitment. Only a fixed-term CD locks the rate, and it locks your access along with it.

FDIC insurance basics