With respect to FDIC limits, a savings account is the same as a checking account.
The Federal Deposit Insurance Corporation (FDIC) is an organization that insures certain types of bank accounts in the United States. Some investments, such as mutual funds, stocks, and life insurance policies, are not insured at all, and other investment accounts are covered under various FDIC limits. These limits can get complicated, although the general rule of thumb is that the FDIC insures $250,000 US dollars (USD) per insured banking institution and account category. This means that a person can have two or more fully insured accounts at a bank, as long as each is a different type of account. Some of the basic types of accounts covered by the FDIC include individual, joint, and revocable accounts and some retirement accounts, including individual retirement accounts (IRAs).
More than 4,900 US banks are regulated by the Federal Deposit Insurance Corporation.
For purposes of determining FDIC limits, the categories do not refer to account types such as checking, savings, and certificates of deposit (CDs). As far as the FDIC is concerned, a checking account and a savings account are functionally identical. Instead, insurance coverage is determined based on ownership, and each person can typically have $250,000 of coverage on all individual accounts at a bank, regardless of whether they are savings, checking, or otherwise.
Each account category is normally considered separately when determining FDIC limits. A person cannot have two individual bank accounts worth $250,000 USD and expect them to be covered, although that same person can have an individual account, a joint account, be part of a fund and seek coverage protection of $250,000 USD per account category. For joint and trust accounts, each owner can be insured for $250,000 USD, allowing the account to be worth $500,000 USD or more.
Certain retirement accounts and revocable funds may be subject to other restrictions, and FDIC limits may also be affected by an account with beneficiaries. While the basic principles behind FDIC limits are relatively simple, there are several exceptions and special cases. There are even certain types of interest-free accounts that do not have insurance limits.
While it is possible to determine whether or not an investment is covered by the FDIC limits without outside help, it may be worth retaining the services of a financial planner. The FDIC also offers an automated service on its website to help determine if a person’s accounts exceed the FDIC limits. Seeking outside help from a financial planner, accountant, or the FDIC itself can help ensure money isn’t accidentally left in uninsured accounts.