Resource Center / Banking

FDIC Insurance – How it Works and How to Maximize it

Written by Live Oak Bank

FDIC Insurance – How it Works and Why it Matters

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The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the U.S. government. Created in 1933 during the Great Depression, the FDIC was founded to insure bank deposits in case the bank failed. The FDIC was established to increase the public’s trust in the banking system.


How Does the FDIC Work?

When you deposit your money into a bank account, your funds do not just sit idle. Banks actually invest your money to earn revenue. At Live Oak, we invest your dollars into small business ventures across the nation. Watch our video to learn more about how we invest your money. FDIC insurance protects these deposits on your behalf. FDIC coverage applies to deposit accounts, including checking accounts, savings accounts, money market deposit accounts, and Certificates of Deposit.

Live Oak Bank participates in the FDIC insurance coverage program on all of our deposits products. FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. FDIC coverage starts automatically as soon as you open your account. But keep in mind: if you choose to create a payable-on-death account, we’ll need some identifying information about your beneficiaries—like an address, birthdate, and government-issued ID number—to comply with the FDIC’s record keeping rules. You can be strategic about gaining additional coverage.


How Consumers Can Maximize FDIC Insurance Coverage

As a consumer, there’s a strategy to maximize your FDIC insurance coverage by opening accounts in different ownership categories.

  1. Single account. When you open an account by yourself (single account), the coverage limit is $250,000 per owner. Married couples can each open a single account and have full coverage on both accounts, up to $250,000 per account. So, a couple could have $500,000 protected by the FDIC with two single accounts.
  2. Joint account opened by two or more people, without named beneficiaries. If you open a joint account with two owners (example: you and your spouse), you will each be covered up to $250,000, which doubles your FDIC coverage.
  3. Account with beneficiaries (aka revocable trust account).  You can increase your FDIC insurance coverage by creating a payable-on-death account (also known as an informal trust or in-trust-for) or titling an account in the name of a formal revocable trust. For these account types, each unique beneficiary adds $250,000 of coverage up to FDIC limits. For example, a payable-on-death account with 1 owner and 5 beneficiaries could be insured up to $1,250,000.

    If you have any questions about FDIC insurance and its coverage, please visit:

Insured Cash Sweep for Businesses via IntraFi Network Deposit

For businesses, a wise option to protect your assets is an insured cash sweep from Live Oak. It’s a secure and efficient way to protect assets beyond $250,000 via a single bank relationship. Essentially, you can deposit funds beyond $250,000 with Live Oak and we’ll work with our trusted partner, IntraFi, to disperse the funds across various banks in amounts no greater than $250,000 to ensure FDIC coverage.
Funds placed through IntraFi Network Deposits are deposited only in FDIC-insured banks. Live Oak Bank will act as custodian for your IntraFi Network deposits, and the sub-custodian for IntraFi Network deposits is The Bank of New York Mellon (“BNY Mellon”), the largest custodian in the world with total assets of more than $43 trillion*.
Unique to IntraFi Network, a depositor can obtain a confirmation of records maintained by BNY Mellon as sub-custodian in order to reconcile those records with the statements received from us. At any time, as often as desired, a depositor can obtain a certified statement from BNY Mellon that confirms the exact amount of his or her accounts, including principal balance and accrued interest, for each FDIC-insured institution that issues an account through IntraFi Network. You can submit a request for the certified statement, along with BNY Mellon’s processing fee, through us. BNY Mellon will send the certified statement directly to you or to another party, such as an auditor, designated by you.
Your account information will remained protected and your relationship remains between you and Live Oak Bank. You’ll still earn Live Oak’s competitive savings rate, and can maintain one banking relationship while knowing your assets are fully insured through multiple banks.

How do I get started with a Live Oak insured cash sweep, or ask questions about FDIC coverage?

You can learn more about an insured cash sweep here or contact our Customer Success Managers, available Monday through Friday 8:00 a.m. – 8:00 p.m. EST.
Phone: 866.518.0286

Commitment to Our Customers

The examples above are simply to explain how FDIC coverage works and are not intended as financial planning advice – be sure to have a conversation with your own financial advisor. Did you know that you can get help with calculating your FDIC coverage? You can find out how much FDIC coverage you have by using the EDIE calculator found on the FDIC’s website.
It’s important to note that not all banks have FDIC insurance, so be sure to ask before you open a deposit account. Check to see if your bank has coverage on the FDIC’s website here.
Live Oak is committed to keeping your assets safe and we’ll work with you to maximize your FDIC insurance coverage, or set up an insured cash sweep, depending on your needs.
*As reported by BNY Mellon in June 30, 2022.
*IntraFi Network Deposits is a registered service mark of Promontory Interfinancial Network, LLC. Placements of your funds through the IntraFi Network Deposits service is subject to the terms, conditions, and disclosures set forth in the agreements you enter into with us, including the applicable Deposit Placement Agreement. Limits apply, and customer eligibility criteria may apply. If a depositor is subject to the restrictions with respect to the placement of funds in depository institutions, it is the responsibility of the depositor to determine whether the placement of the depositor’s funds through IntraFi Network or IntraFi Network Deposits-CD Option, or a particular transaction, satisfies those restrictions.


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