To which amount does FDIC insurance cover insured deposits per depositor?

The correct coverage limit for FDIC insurance is $250,000 per depositor, effectively protecting individuals' funds in the event that an FDIC-insured bank fails. This limit applies to the total of all deposits an individual has in the same bank, including checking accounts, savings accounts and certificates of deposit (CDs).

Understanding this limit is crucial for individuals when considering how much money they should keep in a single banking institution. If the aggregate deposits exceed this insurance limit, the amount above $250,000 would not be insured and could be at risk. Hence, it is advisable for depositors with significant assets to either spread their funds across different banks or utilize accounts in different ownership categories to maximize their insurance coverage.

Recognizing the importance of this limit helps to ensure that individuals make informed decisions about their savings and manage their banking relationships wisely.