The Federal Deposit Insurance Corporation, or FDIC, insures deposits if a member bank or financial institution fails. It guarantees common account types, including checking accounts, savings accounts and CDs.
FDIC coverage has limits: it only protects up to $250,000 per depositor, per insured bank, for each account ownership category (individual, joint or business account).
But some financial institutions, primarily fintechs and online banks, offer FDIC coverage that exceeds the $250,000 limit. Here's how they do it.
How does FDIC insurance work?
FDIC insurance is automatically applied to deposit accounts at FDIC-insured banks. Each depositor is covered for $250,000 per institution and per ownership category (i.e., joint or individual account).
Investment products like mutual funds, annuities, stocks, and bonds aren't covered by FDIC insurance.
To see if your bank is FDIC-insured, you can use the FDIC's BankFind tool or check the bank's website.
How financial institutions go beyond the $250,000 limit
Most fintechs, neobanks and financial advisory companies operate without bank charters and are not directly insured by the FDIC. To protect depositors, they align with partner banks that are insured.
Betterment, for example, partners with HSBC, Truist and Western Alliance, among many others.
"If you were to deposit $2 million cash, we would place $250,000 round robin in banks in our network," says Betterment president Mike Reust. "We make sure we have enough banks to meet our promise to you, which is to offer a certain FDIC insurance limit."
"Instead of you opening an account at 10 places," Reust adds, "we take care of it for you."
While these institutions handle the movement of cash between partner banks on your behalf, you should still review the banks in their network because. you may already have substantial funds deposited in one or more.
If you have a savings account with HSBC and open an account with Betterment, for example, you could unknowingly go over the $250,000 limit and any excess funds wouldn't be insured.
You can find a list of partner banks on each institution's website and your statements should tell you how your cash is allocated among them.
Accounts that offer increased FDIC coverage
These financial institutions offer high-yield savings accounts and work with partner banks to provide higher FDIC limits.
Wealthfront
Through a network of more than 30 program banks, Wealthfront's Cash Account provides up to $8 million of FDIC coverage for individual accounts and $16 million for joint accounts.
Depositors enjoy an above-average APY, no minimum account balance or account fees and access to over 19,000 no-fee ATMs nationwide.
Wealthfront Cash Account
Annual Percentage Yield (APY)
3.50% APY
Minimum balance
None
Monthly fee
None
Maximum transactions
Unlimited transfers and free same-day withdrawals
FDIC insurance coverage
Up to $8 million
Terms apply.
Pros
- Above-average APY
- No minimum balance or deposit
- No monthly fee
- Unlimited transfers and free same-day withdrawals
- FDIC insurance up to $8 million
Cons
- Limited customer support
Betterment
Betterment offers $2 million of FDIC insurance for individual Cash Reserve accounts and $4 million for joint accounts.
Accounts come with zero monthly fees or overdraft fees, unlimited withdrawals and a Betterment debit card that provides cash-back rewards at stores like Costco and Sam's Club.
Betterment Cash Reserve
Annual Percentage Yield (APY)
4.75% APY
Minimum balance
$10 deposit
Monthly fee
None
Maximum transactions
Unlimited withdrawals
FDIC insurance coverage
Up to $2 million
Terms apply.
SoFi
SoFi offers enrolled Checking and Savings customers up to $3 million of FDIC insurance* on deposits. Debit card transactions are rounded to the nearest dollar and the difference is deposited into your savings account, making it easy to put aside money for a rainy day.
FDIC FAQs
How can the FDIC insure a $1 million deposit account?
While the standard limit for FDIC protection is $250,00 per customer per bank, some fintech and financial services companies, including SoFi, Wealthfront and Betterment, "sweep" larger deposits across several partner banks. This allows them to offer customers $1 million of FDIC coverage or more.
Should you keep more than $250,000 in one bank account?
Keeping over $250,000 in one bank account means that you won't have FDIC coverage on a portion of your deposit. To get more coverage, you could open a joint account, deposit the excess at another bank or credit union or open an account with a financial institution that automatically spreads large deposits across partner banks.
Are CDs covered by the FDIC?
Yes, CDs purchased from FDIC-insured banks are covered by FDIC insurance. If the bank fails, your principal deposit and any interest are protected up to the $250,000 limit per depositor, per bank. Beyond CDs, this protection extends to all deposit accounts at FDIC-insured institutions, including checking accounts and savings accounts..
Money matters — so make the most of it. Get expert tips, strategies, news and everything else you need to maximize your money, right to your inbox. Sign up here.
Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Betterment president Mike Reust, who has been with the company since 2013. Reust graduated magna cum laude from Rose-Hulman Institute of Technology with a BS in software engineering and a minor in economics.
Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.
Read more
* New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more) OR $400 (with at least $5,000 total Eligible Direct Deposits received within 25 calendar days of your first Eligible Direct Deposit of $1 or more). Cash bonus amount will be based on the total amount of Eligible Direct Deposit received within 25 calendar days of your first Eligible Direct Deposit of $1 or more. If you have satisfied the Eligible Direct Deposit requirements but have not received a cash bonus in your Checking account, please contact us at 855-456-7634 with the details of your Eligible Direct Deposit. Direct Deposit Promotion begins on 5/15/2026 and will be available through 12/31/26. See full bonus and annual percentage yield (APY) terms at sofi.com/banking/checking-offer/ *SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Eligible Direct Deposit can earn up to 3.10% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the 3.10% APY for savings (including Vaults). Members without Eligible Direct Deposit will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. *SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per depositor per legal category of account ownership, as described in the FDIC's regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $3M through participation in the program. See full terms at SoFi.com/banking/fdic/sidpterms. See list of participating banks at SoFi.com/banking/fdic/participatingbanks. *Earn up to 3.80% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.10% APY) for up to 6 months. Open a new SoFi Checking & Savings account with Eligible Direct Deposit by 12/31/26. Rates variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC *Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 5/28/26. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
