2025 Guide: Are My IRA or Roth IRA Accounts FDIC-Insured and What Are the Limits?

Understanding whether your IRA or Roth IRA is FDIC-insured depends largely on the type of financial institution holding your account and the specific assets within it.

During times of economic uncertainty and market downturns, safeguarding your retirement savings becomes a top priority. If you have a traditional IRA or Roth IRA, you might ask: does FDIC insurance cover these accounts? Here's an up-to-date explanation to help you make informed decisions.

Key Points to Remember

• FDIC insurance protects deposits held at FDIC-member banks and savings associations, including funds within IRA accounts that are deposited in insured products.
• Deposit accounts such as checking, savings, money market deposit accounts, and certificates of deposit (CDs) held inside traditional or Roth IRAs are covered by FDIC insurance.
• The FDIC insurance limit is $250,000 per depositor, per insured bank, for each ownership category. It’s important to track your balances across accounts within the same bank to ensure full coverage.

What Is the FDIC and How Does It Protect You?

The Federal Deposit Insurance Corporation (FDIC) is a federal agency established in 1933 to safeguard depositors against bank failures. Its mission is to provide peace of mind by insuring deposits up to $250,000 per depositor, per bank, per account ownership category.

FDIC insurance covers traditional banking products such as checking accounts, savings accounts, money market deposit accounts, and CDs at FDIC-insured institutions. During financial crises, the FDIC remains the most reliable protection for your insured deposits.

However, the FDIC's coverage varies when it comes to IRAs, depending on the types of investments held and the financial institution involved.

Important Update

In March 2023, following the collapse of Silicon Valley Bank and Signature Bank, the FDIC, Treasury, and Federal Reserve temporarily waived the $250,000 insurance limits to protect all customer deposits. Whether such measures will be applied in future bank failures remains uncertain.

Which IRA Accounts Are FDIC-Insured?

Traditional and Roth IRAs are retirement accounts designed to help individuals save with tax advantages. The key difference lies in tax timing: traditional IRAs offer tax deductions upfront, while Roth IRAs provide tax-free withdrawals in retirement.

When your IRA holds deposit products like checking, savings, money market accounts, or CDs at FDIC-insured banks, these assets are covered by FDIC insurance up to the applicable limits. For example, a CD IRA opened at an FDIC-member bank is insured up to $250,000.

Which IRA Investments Are Not Covered?

FDIC insurance does not extend to investments such as mutual funds, exchange-traded funds (ETFs), stocks, or bonds held within an IRA, even if the account is maintained at an FDIC-insured institution. In these cases, investment risk remains with the account holder.

Additional Note

FDIC insurance limits apply separately across different ownership categories—including individual, joint, and certain retirement accounts—potentially increasing your total insured amount at a single bank.

Understanding FDIC Coverage Limits in 2024

Since 2008, the FDIC has insured deposit accounts up to $250,000 per depositor, per insured bank, per account ownership category. This includes both non-IRA and IRA deposit accounts, which are insured separately.

For example, if you have a $125,000 CD and a $215,000 money market deposit account at the same bank under a single ownership, your total deposits ($340,000) exceed the $250,000 limit, leaving $90,000 uninsured.

Similarly, if you hold a $200,000 CD within a traditional IRA and a $100,000 savings account in a Roth IRA at the same bank, the combined IRA deposits are insured up to $250,000, leaving $50,000 uninsured.

However, IRA deposit accounts and non-IRA deposit accounts are insured separately. So, if you also have a $100,000 non-IRA savings account at the same bank, it would be separately insured up to $250,000, making your total insured deposits $350,000.

Role and Process of FDIC Insurance

FDIC insurance protects your deposits in the event of a bank failure. Funded by premiums paid by banks—not customers or taxpayers—the FDIC either transfers your insured deposits to another institution or issues a reimbursement check, typically within a few days.

Are Credit Union Accounts FDIC-Insured?

No, credit union deposits are not covered by the FDIC but are protected by the National Credit Union Administration (NCUA) with similar insurance coverage.

Summary

Bank-held IRAs that include deposit products offer FDIC insurance protection, providing security for your retirement savings up to $250,000 per ownership category at each bank. While these accounts may have less growth potential compared to market investments, they ensure your principal is safe from bank failures. Investments outside deposit accounts do not have FDIC protection and carry market risk.

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