Does the Government Insure Business Accounts at Banks?

The federal government provides insurance for millions of savings, checking and money market accounts at U.S. banks. The insurance programs cover business accounts as well as personal savings. However, not all types of bank accounts are covered. There are also limits on the amount of coverage that federal insurance provides. Businesses should carefully review their financial accounts to make sure their assets are receiving maximum coverage.

The Federal Deposit Insurance Corporation, or FDIC, is the key government agency providing insurance coverage for bank accounts. FDIC insurance covers many types of accounts for personal as well as business deposits, including savings, checking, money market accounts and certificates of deposit (CDs).

Business savings and checking accounts covered by FDIC insurance include accounts established by corporations, partnerships and associations, as well as employee benefit plan accounts and many retirement accounts. FDIC insurance covers both revocable and irrevocable financial trusts.

All FDIC insurance has a coverage limit of $250,000. This limit generally applies to total deposits for an individual depositor at an individual bank. If your business has more than one account at your bank, then your coverage for all accounts, combined, is $250,000. You can receive additional coverage by opening accounts at the same bank under a separately-incorporated business name, or by opening accounts at other banks.

Both business and personal accounts at credit unions are insured by a different agency of the federal government. The National Credit Union Administration, or NCUA, insures credit union accounts in much the same manner as the FDIC insures bank accounts. NCUA coverage limits for savings and checking accounts, money markets and CDs are the same as those of the FDIC, insuring a depositor's accounts up to $250,000.

Federally-provided insurance, whether through FDIC or NCUA, does not cover all types of business bank accounts and financial services. In particular, insurance does not cover stocks, bonds, shares of mutual funds, insurance policies, annuities or other types of securities held by your bank.

Your bank or credit union can confirm that their operations are covered by either FDIC or NCUA insurance. You can review the status of your accounts with a bank or credit union official to identify any accounts that are not insured or any assets that are unprotected because they exceed maximum coverage. Use the FDIC's BankFind look-up service online (see References) to confirm that your bank is FDIC-insured. Credit union accounts can be confirmed with the NCUA "Research a Credit Union" tool (see References).