Are CDs FDIC Insured?

A bank vault.

Certificates of Deposit [CDs] offer significant advantages for business cash including higher rates of return, predictable income, and managed liquidity. Despite these well-known benefits, one important question remains – do they offer the same level of safety as other cash accounts?

Some types of CDs are available with the highest level of safety – FDIC insurance – while others are not. The main factor that determines which CDs are covered by this government protection is the type of institution that issues them, so be selective when choosing a banking partner.

CDs Issued by Member Banks Are Covered by FDIC Insurance

Like other types of deposit accounts, CDs offered by FDIC member banks are fully insured up to the $250,000 per ownership category limit. This means a business can receive government protection up to the limit for a combination of checking, savings, money market accounts, and CDs at a single bank.

The FDIC limit applies to all CDs issued by a particular bank, whether a business purchases them directly at that bank or through another institution. This rule comes into play in three common scenarios.

  1. A business buys CDs directly from an FDIC member bank.
  2. A business buys CDs issued by an FDIC member bank through a brokerage firm. These are often called “brokered CDs.”
  3. A business buys CDs issued by an FDIC member bank through a deposit management company that provides access to extended government protection.

As these examples show, FDIC insurance is not impacted by the institution a business uses to facilitate the purchase of CDs. Rather, FDIC insurance depends on the bank that issues the CDs.

CDs Issued by Non-Member Banks Are Not FDIC Insured

CDs offered by banks or other financial institutions that are not members of the FDIC are not covered by FDIC insurance. One of the most common examples of this are CDs issued by credit unions, some of which are insured by their own governing body – the NCUA. CDs issued by NCUA member credit unions are covered by government protection that is functionally equivalent to FDIC insurance and offers the same degree of safety.

On the other hand, CDs offered by non-FDIC member banks and non-NCUA member credit unions are not federally protected. Some of these CDs offer private or state guarantees, but this protection is not as strong as protection from the FDIC or NCUA. You can check to see if your bank is a member of the FDIC using the FDIC BankFind tool.

Why is FDIC Insurance Important for CDs?

When investing business cash, FDIC insurance is vital because it protects your company from losses associated with bank failure. This protection is particularly important today given the recent turmoil in the banking sector and the possibility of further unrest in the future.

The FDIC is backed by the full faith and credit of the United States government and no depositor has ever lost a penny of insured funds. However, this guarantee only applies to funds up to the $250,000 per ownership category limit at each insured bank.

You could achieve protection above the limit by spreading cash across multiple FDIC insured banks, but it is extremely time consuming to manage multiple banking relationships and the reconciliations that come with them. Fortunately, there is a simpler, more effective way to achieve protection for all your company’s cash.

Access Extended FDIC Insurance for CDs with ADM

At the American Deposit Management Co. [ADM], our goal is to help businesses achieve the ultimate protection for all their cash reserves. That’s why we developed proprietary deposit management solutions that offer access to the government protection your business needs.

Our solutions provide access to unlimited government insurance as well as a host of other benefits including nationally competitive returns, liquidity to match your schedule, and outstanding customer service. Best of all, we achieve all of this with one account and one consolidated monthly statement.

Contact us to learn more and get started today.


*American Deposit Management Co. is not an FDIC/NCUA-insured institution. FDIC/NCUA deposit coverage only protects against the failure of an FDIC/NCUA-insured depository institution.

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