You insure your home, health and cars to protect your more valuable possessions. But what about your money? Ally Bank is a member of the Federal Deposit Insurance Corporation (FDIC), and we'll walk through how that impacts you as an Ally Bank customer.
Introduced in 1933 during the Great Depression, the FDIC continues to insure Americans’ bank deposits in case of bank failure — ultimately guaranteeing the money stays in the customer’s possession.
As an Ally Bank customer, your deposits are FDIC-insured up to the maximum allowed by law. What does that mean for you and your finances? Here’s what you need to know.
How does FDIC coverage work?
Money in an FDIC-insured bank, such as Ally Bank, is covered up to $250,000 (including principal and interest) per depositor, per qualifying account ownership category — but you could very well qualify for more than $250,000 in coverage if you open accounts across different categories. Examples of ownership categories include single accounts, joint accounts, retirement accounts and trusts.
The FDIC insures traditional deposit accounts, which would include Ally Bank’s Spending Account, Savings Accounts, Individual Retirement Accounts (IRAs) and Money Market Accounts, as well as Certificates of Deposit (CD), cashier’s checks, money orders and other items issued by a bank. It does not insure investment products, such as stocks, bonds, mutual funds, annuities or investment IRAs, nor does it insure life insurance policies or safe deposit boxes.
How to maximize your FDIC coverage at Ally Bank
You may be asking yourself: What do I do if I have more than $250,000?
Good news — there are a number of ways you can expand your FDIC coverage beyond $250,000. It will take a little coordination between different account ownership categories — but it’s well worth it to get the coverage you need.
You have options to maximize your coverage at Ally Bank, if you spread your money across different categories. Take a look at this breakdown of different account ownership categories and their coverage:
Account ownership category | Details | Coverage example |
|---|---|---|
Single accounts | Open a separate, unique deposit account at Ally Bank in the name of each individual family member | One individual account owner = $250,000 |
Joint accounts | Open a joint account at Ally Bank and each co-owner’s share of all joint accounts will be added together and insured up to $250,000 for each account owner (for up to four co-owners) | You + Co-owner = $250,000 + $250,000 for a total of $500,000 |
Retirement accounts | Open an Ally Bank IRA Savings and/or IRA CD(s) | One individual retirement account owner = $250,000 |
Revocable and irrevocable trust accounts | Add beneficiaries to any single or joint account to create a payable-on-death (POD) account (revocable trust), or open accounts in the name of a Living trust established by a written trust agreement (formal revocable or irrevocable trusts) to qualify for coverage up to $250,000 per eligible beneficiary (up to a maximum of $1.25 million total) | This example shows coverage eligibility for up to five unique beneficiaries (for a maximum coverage amount of $1.25 million) Owner + One beneficiary = $250,000 Owner + Two beneficiaries = $250,000 + $250,000 for a total of $500,000 Owner + Three beneficiaries = $250,000 + $250,000 + $250,000 for a total of $750,000 Owner + Four beneficiaries = $250,000 + $250,000 + $250,000 + $250,000 for a total of $1 million Owner + Five beneficiaries = $250,000 + $250,000 + $250,000 + $250,000 + $250,000 for a total of $1.25 million |
Explore other ways to maximize coverage
Beyond the types of deposit accounts at Ally Bank, the FDIC also insures other less common deposit account types up to $250,000, including:
Corporation, partnership or unincorporated association accounts: Many business deposit accounts are protected by FDIC, but keep in mind accounts of a sole proprietorship or Doing Business As (DBA) are not insured under this category
Employee benefit plan accounts: Some employers offer employee welfare or pension benefit plans that are insured by the FDIC
Education savings: Accounts like Coverdell education savings accounts are insured as irrevocable trusts by the FDIC, provided the funds within are cash deposits or CDs (and not held as investments, which are not insured by the FDIC)
Government accounts: Accounts owned by the federal government, state governments and certain other governmental bodies are FDIC insured
Your financial future is in good hands
Thanks to FDIC coverage and a variety of digital banking options, Ally Bank customers can be confident knowing their money is protected up to the maximum allowed by law. With all the cash you’ve worked so hard to save properly insured, you can rest easy in the present and help secure a successful financial future.
