Are money market accounts FDIC insured?
Understanding FDIC insurance helps you protect your savings and know your coverage limits.
Are money market accounts insured: Money market accounts (MMAs) at FDIC-member banks are insured up to $250,000 per depositor, per bank, per ownership category.
What is not covered by the FDIC: FDIC insurance does not cover investments like mutual funds, stocks, or annuities — even if purchased at an FDIC-insured bank.
Confirm your bank is covered: Confirming your bank’s FDIC membership ensures your deposits are protected if the bank fails.
What is a money market account?
A money market account (MMA), also known as a money market deposit account (MMDA), is a type of interest-bearing deposit account offered by banks, credit unions, and online banks. They are known for offering competitive interest rates, often higher than those of traditional savings accounts, and sometimes combine features of banking and savings accounts, such as check writing or debit card usage, for a flexible savings option.
Money market accounts can be a way for you to earn interest on your cash savings while still having access to your funds when you need them. However, it is important to note that some banks impose monthly withdrawal limits, so you may want to check this with your institution. Many banks also require higher minimum deposits for MMAs, which can vary by institution (e.g., $500–$2,500), but at Raisin, you can open an MMA with just $1.
It is also important to distinguish the difference between money market accounts (a deposit savings account) and money market funds, which are an investment product (mutual funds).
What is FDIC insurance?
Money market accounts are generally considered a safe savings option, mainly due to the Federal Deposit Insurance Corporation (FDIC) insurance that protects eligible deposits. But what exactly is FDIC insurance, and how does it work?
FDIC insurance is a government-backed protection program offered by the Federal Deposit Insurance Corporation in the United States. It was created in 1933 to restore trust in the banking system during the Great Depression.1 You can think of FDIC insurance as a safety net in the event your bank collapses, which is why FDIC insurance on money market accounts matters.
Here’s a breakdown of how it works:
Coverage amount: FDIC insurance protects up to $250,000 per depositor, per insured bank, per account ownership category (e.g., individual, joint, or trust accounts).
What’s covered: In general, checking accounts, savings accounts (including high-yield savings accounts), money market deposit accounts, business accounts (like a business MMA), and certificates of deposit (CDs) are covered if they were held in an FDIC-insured bank.
What’s not covered: Investments like stocks, bonds, mutual funds (like money market funds), life insurance, annuities, or municipal securities (even if purchased through an FDIC-insured bank) are not covered.
Why it matters: If an FDIC-insured bank were to fail, the FDIC ensures you still get your insured deposits back (up to the protection limit).
Similar to the FDIC, credit unions also offer deposit protection through the National Credit Union Administration (NCUA).
FDIC insurance coverage for money market accounts
The standard insurance amount under the FDIC is $250,000 per depositor, per insured bank, for each account ownership category. However, it is important to note that when calculating your coverage amount, the FDIC adds together all of your deposit accounts held in the same ownership category at the same bank regardless of deposit type. This means all the money from your checking, savings, CDs, or MMA accounts would be added together, and the FDIC would cover up to a cumulative $250,000. Note that accumulated interest on interest-bearing account(s) also applies towards the insurance limit.
To put things into perspective, let's say you have the following deposits at one FDIC-insured bank:
$120,000 in an MMA
$50,000 in a CD
$8,000 in a savings account
Since your cumulative deposits are still within the $250,000 limit, funds in all of your accounts would be protected.
However, if you were to have a joint or trust account, you may be entitled to expanded coverage (e.g., $250,000 per co-owner of a joint account).2
You can use the FDIC’s Electronic Deposit Insurance Estimator (EDIE) to help calculate your specific insurance coverage.
How to confirm if your account is FDIC insured
If you are still wondering, “Is a money market account FDIC insured?”, the short answer is yes, as long as your account was issued by a bank that is a member of the FDIC. However, you might still want to confirm this yourself just to be safe.
Here are some ways you can check if your bank is FDIC insured:
Check bank membership with FDIC: You can check if your bank is insured directly with the FDIC by using their BankFind Suite tool, or, alternatively, by calling them toll-free at 877-ASKFDIC (877-275-3342).
Look for “Member FDIC” disclosures: You can look for the official FDIC sign at the bank’s physical location or on their website.
Ask the bank directly: Contact your bank directly and ask them if they are an FDIC member.
In the event that your bank fails, and they are not FDIC members, your funds will not be covered, and you could lose your savings. Therefore, it may be best to ensure that your accounts will be insured.
Bottom line
Money market accounts can be a safe way to grow your savings while maintaining access to your funds — given that your bank is FDIC insured. You might want to confirm your institution's coverage just to be safe and keep track of your total deposits across accounts to ensure you stay within the $250,000 insurance limit. Understanding these details can help safeguard your money and provide peace of mind.
If you’re ready to open your own MMA, Raisin is here to help. The Raisin marketplace gives you access to MMAs and other high-yield savings products with competitive interest rates to help you boost your savings. Explore account types, compare rates, and sign up today to start maximizing your savings potential!
FAQs on money market accounts and FDIC insurance
What is not covered by FDIC insurance?
FDIC insurance does not protect investments such as stocks, bonds, mutual funds, municipal securities, annuities, or life insurance policies — even if purchased through your bank.
Are credit union accounts insured the same way?
Yes. Credit unions are insured by the National Credit Union Administration (NCUA), which provides coverage equivalent to FDIC insurance: up to $250,000 per depositor, per institution, per ownership category.
Does FDIC insurance cover joint accounts separately?
Yes. Each co-owner of a joint account is insured up to $250,000, essentially expanding your coverage. For example, a joint account with two owners could be insured up to $500,000 collectively.
Are CDs FDIC insured like savings and money market accounts?
Yes. Certificates of deposit (CDs) are also insured if they are held at an FDIC-insured bank, meaning they are covered under the same $250,000 per depositor, per bank, per ownership category rule.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.