FDIC Limits ($250K)

The Federal Deposit Insurance Corporation backs deposits at member banks up to $250,000 per depositor, per bank, per ownership category. A business with $2 million in a single operating account has $1.75 million uninsured, a real risk that most owners underestimate until a bank runs into trouble.

The three coverage variables can be stacked. 'Per depositor' means each legal entity gets its own $250,000 limit: the business, the owner personally, a trust, an LLC. 'Per bank' means moving money across banks multiplies coverage. 'Per ownership category' means single accounts, joint accounts, retirement accounts, and revocable trust accounts each carry a separate $250,000 shelf at the same bank.

For business accounts specifically, deposits owned by a corporation, partnership, or LLC that is engaged in an independent activity sit in their own ownership category, insured separately from the owners' personal accounts. The catch is that every account that entity holds at that bank combines into one $250,000 bucket, no matter how many accounts, titles, or signers exist. A sole proprietorship gets no separate category at all: a DBA has no independent legal existence, so those balances combine with the owner's personal single accounts at the same bank.

Programs like IntraFi's ICS and CDARS distribute deposits across a network of member banks while keeping the whole balance under FDIC insurance and giving you a single statement. Cash sitting in U.S. Treasury bills or a government money-market fund carries full government backing outside the FDIC framework, which is a different protection rather than a larger version of FDIC coverage. Balances held at a fintech or payments platform are insured only when the funds actually sit in a properly titled account at an insured bank with accurate records behind them.