FDIC Insurance Limits in 2026

Congress created the Federal Deposit Insurance Corporation [FDIC] to protect public deposits and rebuild trust in the financial system following the widespread bank runs of the Great Depression. That was back in 1934, and not much has changed since then – except for the FDIC coverage limit.

FDIC Insurance Limits In 2026

In 2026, FDIC insurance covers up to $250,000 per ownership category at each insured bank. This coverage extends to both principal and accrued interest while the account balance remains within the limits.

An ownership category is the type of account or institution holding the account. For example, an individual can be the sole owner of their personal account, a joint owner with another individual on a joint account, and the manager of an account owned by their business. In this case, they could receive $250,000 of insurance for each account, even at the same bank. However, if they opened two individual accounts in their own name, or two separate accounts for their business at the same bank, they would only receive up to $250,000 in coverage for each ownership category.

The FDIC coverage limit has grown over the past nine decades that the agency has operated. It was established at an initial level of just $2,500 and has increased 100x since that time. The most recent change followed the 2008 financial crisis, despite many subsequent pleas from businesses and individuals to increase the coverage amount.

Limitations On FDIC Insurance

FDIC insurance is automatic when a business or an individual holds cash in a covered account at an FDIC member bank. However, there are important details that cash managers should understand.

First, the FDIC will cover business accounts as long as the entity was not formed for the sole purpose of extending FDIC insurance. Second, only certain types of accounts are covered by FDIC insurance – deposit accounts and certificates of deposit. Finally, business deposits do not impact FDIC insurance coverage amounts for any individual owners or employees who have deposits at the same bank.

Recent Banking Turmoil Reaffirmed the Importance of FDIC Insurance

Three of the four largest bank failures in American history occurred in 2023. All three of the failed banks held an abnormally large percentage of uninsured deposits – those above the FDIC limit. Due to the abundance of uninsured deposits, many of the businesses that invested with these banks faced the prospect of losing their funds.

Fortunately, the FDIC and Treasury took historic action to protect depositors at the failed banks, but businesses shouldn’t rely on the possibility of special accommodation to protect them from bank failures in the future. Instead, these companies should ensure all their cash is covered by government insurance.

Businesses can extend FDIC insurance limits.

As a business grows, a combination of checking accounts, money market accounts, and certificates of deposit can quickly exceed the $250,000 limit. This situation creates a real risk of losing deposits in the event of a bank failure. In the past, this problem required a labor-intensive solution.

For example, to overcome the standard limitations of FDIC insurance at a single bank, a business could create enough accounts at other insured banks to gain full coverage. This strategy utilizes the combined FDIC insurance of the various banks to extend the total amount of coverage. However, manually managing several banking relationships and the related reconciliations is a tedious and often costly process.

To illustrate the complexity of this process, consider a business with millions in cash that must be deposited safely and readily available when needed. That business would need to identify the banks with the best rates, develop and manage relationships at all those banks, and perform reconciliations for many account statements. Then, that business would need to monitor the marketplace to ensure they are getting the most competitive rates available, while continuously shifting funds to maintain an optimal return on investment.

This highly manual process would require an entire team of employees to effectively manage. However, with modern cash solutions, those days are over.

Fintech Alternatives for Extending FDIC Insurance

Some services such as Network Deposits^SM – formerly CDARS and ICS – can extend FDIC protection with a single account, but these services carry additional costs and limitations on the amount of coverage, types of protection, and availability of funds. These limitations require businesses to make concessions to achieve their goals.

On the other hand, our company – American Deposit Management – provides access to extended FDIC coverage* for business cash without these limitations. AMMA™ Exchange, our newest product, allows financial institutions to offer their customers access to extended government protection. Our corporate clients can also take advantage of our modern cash solutions that automatically distribute funds across our nationwide network of financial institutions that compete for deposits. This process allows a business to achieve access to extended FDIC protection* along with nationally competitive returns. The best part is businesses can receive these benefits with one account and one consolidated monthly statement.

Earn more, risk less® with ADM.

At ADM, we take the work of business cash management off your plate. In addition to extended safety and nationally competitive returns for business deposits, we offer a full suite of cash management solutions. From business escrow to vendor payments, we’ve got business cash management covered.

If your organization maintains a large reserve of cash, is looking to make a major purchase, or if you are trying to reduce the work required to manage business cash, don’t hesitate to contact us.

For even more valuable insights on banking, interest rates, and effectively managing your business cash, be sure to subscribe to our mailing list and follow us on LinkedIn.

*Funds in an AMMA™ can be deposited with traditional banks or Credit Unions. When funds are deposited at a credit union, NCUA insurance will be available in lieu of FDIC insurance and is functionally equivalent.