FDIC Insurance: Charles Schwab: FDIC Coverage

FDIC Insurance

Charles Schwab & Co., Inc.

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What is FDIC insurance?
How is FDIC insurance coverage determined?
How can I calculate my FDIC insurance coverage?
What counts toward the FDIC limits at Schwab Bank?
What counts toward the FDIC limits for Schwab brokerage accounts?
Examples of FDIC coverage
More information on FDIC coverage

What is FDIC insurance?

The FDIC—or Federal Deposit Insurance Corporation—is a U.S. federal agency that protects you against the loss of your deposit accounts (such as checking and savings) if your FDIC insured bank fails.

The basic FDIC insurance amount is $250,000 per account holder per insured bank for deposit accounts and $250,000 for certain retirement accounts deposited at an insured bank. These insurance limits include principal and accrued interest.

Important note: The temporary increase of FDIC insurance coverage to $250,000 for all insurable capacities has been extended through December 31, 2013. If not further extended, FDIC coverage will revert to $100,000 on January 1, 2014.¹

The FDIC does not insure money invested in stocks, bonds, mutual funds, life insurance policies, annuities, municipal securities, and money market funds, even if these investments were bought from an insured bank.

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How is FDIC insurance coverage determined?

The FDIC insurance limit applies to each account holder at each bank. Here is how the FDIC defines coverage for different account holders by some common "ownership" types:

Single accounts—deposit accounts (e.g., checking, savings) owned by one person. FDIC insurance covers up to $250,000 per owner for all single accounts at each bank.
Joint accounts—deposit accounts owned by two or more people. FDIC insurance covers up to $250,000 per owner for all joint accounts at each bank.
Certain retirement accounts—accounts such as IRAs and self-directed defined contribution plans. FDIC insurance covers up to $250,000 for all deposits in such retirement accounts at each bank.

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How can I calculate my FDIC insurance coverage?

Use the FDIC's Electronic Deposit Insurance Estimator (EDIE) to calculate your FDIC coverage for FDIC insured banks where you have deposit accounts.

You can also use the FDIC's estimator for hypothetical situations. For instance, if you would like to see how much of some assets would be covered by FDIC insurance, you can enter bank and account information and get an estimate on how much would be insured.

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What counts toward the FDIC limits at Schwab Bank?²

The following receive FDIC coverage at Schwab Bank:

Schwab Bank High Yield Investor Checking®
Schwab Bank High Yield Investor Savings™
Bank Sweep Feature—Your Schwab brokerage account includes a feature that pays interest on idle cash. If your account uses the Bank Sweep Feature, your cash balances are automatically swept to deposits at Schwab Bank and are FDIC insured. To see which cash feature is in effect for you, log in and go to your Brokerage Account Balances page.

All deposits in your Schwab Bank checking, savings and Bank Sweep Feature are added together to determine your total amount of FDIC insurance coverage at Schwab Bank (per account holder "ownership" type, as described in the previous section). This rule applies whether you open an account directly at the bank or Schwab brokerage holds the accounts on your behalf. (See Example 2 below.)

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What counts toward the FDIC limits for investments held in Schwab brokerage accounts?

Charles Schwab & Co., acting as a deposit broker, can place deposits at FDIC insured banks on your behalf. In this case, the FDIC insurance available from the bank “passes through” to you.
FDIC insured deposits are available through your Schwab brokerage account for:

Certificates of Deposit—Through Schwab CD OneSource™, you can buy and track CDs from multiple banks in your Schwab brokerage or retirement accounts. Your deposits at each insured bank are insured separately, whether you open the accounts directly from the bank or the deposits are placed for you through a broker. (See Example 1 below.)

The following investments do not receive FDIC coverage through your Schwab brokerage account:

Stocks
Bonds
Mutual funds
Life insurance policies
Annuities
Municipal securities
Money market funds
Cash held in Schwab One Interest Feature

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Examples of FDIC insurance coverage

The examples below use the temporarily extended FDIC limits for individual accounts. The temporary increase of FDIC insurance coverage to $250,000 for all insurable capacities has been extended through December 31, 2013. If not further extended, FDIC coverage will revert to $100,000 on January 1, 2014.

Example 1: If you have a Schwab brokerage account, in just your name, with two $250,000 CDs from two different banks, and you have no other deposits at those banks, your CDs would be covered for a total of $500,000. However, if those two CDs are from the same bank, then FDIC insurance would cover a total of only $250,000 (leaving $250,000 of these CDs uninsured by FDIC).

Example 2: If you have a Schwab Bank High Yield Investor Checking account, in just your name, with $200,000 and a Schwab brokerage (non-retirement) account with Bank Sweep Feature, in just your name, that has swept cash balances of $75,000 into deposits at Schwab Bank, then FDIC insurance covers both for a total of $250,000 (leaving $25,000 of these deposits uninsured by FDIC).

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More information on FDIC coverage

Calculating deposit insurance can be complex, especially if you have multiple accounts or multiple ownerships.

For more information from the FDIC, visit FDIC: Insuring Your Deposits or use the FDIC's Electronic Deposit Insurance Estimator (EDIE) to estimate your total coverage at a particular bank.

For more information about FDIC insured products available through Schwab Bank or your Schwab brokerage account, contact us.

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1. The temporary increase of FDIC insurance coverage to $250,000 for all insurable capacities has been extended through December 31, 2013. If not further extended, FDIC coverage will revert to $100,000 on January 1, 2014 for all insurable capacities except IRAs and certain other self-directed retirement accounts and plans. Unless the increased coverage is extended, deposit insurance coverage for CDs with a maturity date after December 31, 2013 will revert to the prior FDIC coverage on January 1, 2014, regardless of when you purchased the CD. You should not rely on a possible extension of this increased coverage in purchasing CDs.
2. Schwab Bank is participating in the FDIC’s Transaction Account Guarantee Program. Under that program, through December 31, 2009, all noninterest-bearing transaction accounts are fully guaranteed by the FDIC for the entire amount in the account. Coverage under the Transaction Account Guarantee Program is in addition to and separate from the coverage available under the FDIC’s general deposit insurance rules.
The Bank Sweep feature available to customers that maintain brokerage accounts at our affiliate, Charles Schwab & Co., Inc., is not subject to the FDIC’s Transaction Account Guarantee Program, thus, Bank Sweep funds deposited in Schwab Bank are not guaranteed by the Transaction Account Guarantee Program. However, funds held in deposit accounts at Schwab Bank under the Bank Sweep program will continue to be insured until December 31, 2013, for up to $250,000 under the FDIC’s general deposit insurance rules.

Brokerage Products: Not FDIC Insured • No Bank Guarantee • May Lose Value

Charles Schwab & Co., Inc., and Charles Schwab Bank are separate but affiliated companies and subsidiaries of The Charles Schwab Corporation. Investment products offered by Charles Schwab & Co., Inc., Member SIPC. Deposit and lending products and services are offered by Charles Schwab Bank, Member FDIC.

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Asset protection

Read our SIPC information to see how we protect your Schwab brokerage account.

Estimate your FDIC insurance

FDIC insurance coverage was temporarily increased to $250,000. Use the FDIC's Electronic Deposit Insurance Estimator (EDIE)

to estimate your total FDIC coverage.