Protecting Your Assets: How FDIC and DIF Protect Your Deposits
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In this time of economic uncertainty, keeping your money secure should be a top priority. The Federal Deposit Insurance Corporation (FDIC) and the Depositors Insurance Fund (DIF) play crucial roles in safeguarding your deposits.
FDIC Insurance: Your First Line of Defense
More than just a sticker on the door at your bank, the FDIC, an independent government agency, provides insurance coverage for deposits at member banks. As of 2025, the FDIC insures up to $250,000 per depositor, per institution, and ownership category. This means if you have two different types of accounts (e.g. savings and a CD) at the same bank, you only receive $250,000 of insurance for these accounts even if you have more than this amount deposited.
FDIC insurance is automatic for covered accounts at member banks for individual and business customers, meaning there's no cost to you for the protection. Covered accounts include:
- Checking accounts
- Savings accounts
- Money market deposit accounts (MMDAs)
- Certificates of deposit (CDs)
- Certain retirement accounts, such as IRAs invested in CDs
In instances where an account has more than one owner, the $250,000 coverage per ownership still applies.
For example, a joint account with two owners could be insured up to $500,000 ($250,000 per owner). Similarly, a trust account with three beneficiaries could be insured up to $750,000. The only limitation is that the maximum insurance coverage for a trust owner with five or more beneficiaries is $1,250,000 per owner for all trust accounts held at the same bank. You can add more than five beneficiaries, but the coverage will not exceed $1,250,000.
Depositors Insurance Fund (DIF): Extra Protection for Massachusetts residents
If you're in the fortunate position to have deposits exceeding the FDIC limit, the Depositors Insurance Fund (DIF) provides additional security. A private, industry-sponsored insurance fund unique to Massachusetts, DIF covers deposits above the FDIC insurance amount at DIF member institutions including community savings and cooperative banks, regardless of the amount.
It's important to note that while not all banks are members of DIF, all DIF members are FDIC members. If having deposit insurance for the full amount of your deposit accounts is important to you, please inquire with your financial institution to verify your coverage.
Maximize Your Protection
If your bank is not a DIF member, you can take other steps to boost your asset protection. For example, if your assets exceed the FDIC limit, you can spread them across multiple banks to secure full protection. You can also consider different ownership categories to increase coverage.
The Exceptions to and Lengths of Protection
While FDIC and DIF provide extensive protection, some investment and other assets are not covered. These include:
- Mutual funds
- Stocks and bonds
- Annuities and life insurance policies
- Crypto assets
- Contents of safe deposit boxes
For a complete picture of your current FDIC coverage, click here to access the FDIC calculator. For a list of FDIC-insured banks, click here. For DIF-member banks, click here. Again, any deposit in any amount held at a DIF-member bank is fully insured.
Like any insurance, FDIC and DIF are resources you hope you never need. But unlike other insurances, they're free. By understanding how they work, you can strategically manage your deposits, safeguard your assets, and enjoy peace of mind even in turbulent times.
Dana Robb is the Vice President, Retail Banking & Operations at Pittsfield Cooperative Bank. He has twenty years of experience in consumer and small business banking.
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