The Federal Deposit Insurance Corporation (FDIC) only covers certain types of deposit accounts at FDIC member banks and does not insure investments like 澳洲幸运5官方开奖结果体彩网:mutual funds, whether or not they were sold by a bank. For this reason, most of the money in 澳洲幸运5官方开奖结果体彩网:401(k) plans is not FDIC-insured, except in rare instances. This article explains whether your 401(k) might be covered⁠—or partially covered—by the FDIC.

When the FDIC Covers 401(k) Investments

The FDIC provides 澳洲幸运5官方开奖结果体彩网:insurance coverage to certain types of accounts held at FDIC memb💫er banks. Those inc𓂃lude:

• Checking accounts
• Savings accounts
• Money market deposit accounts (MMDAs)
• Time deposits, such as 澳洲幸运5官方开奖结果体彩网:certificates of deposit (CDs)

It does not cover:

• Stock or bond investments
• Mutual funds
• Crypto assets
• 澳洲幸运5官方开奖结果体彩网:Annuities
• Municipal securities
• U.S. Treasury bills, bonds, or notes

In the case of the latter, uncovered group, even if those𒁏 investments or financial products were sold through an FDIC member ban꧟k, the FDIC does not insure them.

The FDIC provides limited coverage to self-directed 澳洲幸运5官方开奖结果体彩网:defined contribution plans, including self-directed 401(k) plans, to the extent that the assets in them are of a type that normally qualifies for FDIC coverage, as listed above.

A self-directed 401(k) plan is typically a 澳洲幸运5官方开奖结果体彩网:solo 401(k) o🐎r self-employed 401(k). It's sometimes referred to as an 🌠independent 401(k). 🦋These plans are typically set up to serve the owner of a one-person business or that person plus their spouse.

Larger employers may also offer a self-directed 401(k) option to their employees, through a separate self-directed account or "澳洲幸运5官方开奖结果体彩网:brokerage window" that allows them to put all or part of their 401(k) into investments that their employer doesn't make available as part of its regular plan.

In those cases, employees may have the option of choosing FDIC-insured bank products, such as CDs or a 澳洲幸运5官方开奖结果体彩网:money market account, for𒉰 a portion of their 401(k),✃ allowing that much of their 401(k) to obtain FDIC coverage. Suppose, for example, someone has a 401(k) account worth $100,000 in total. If it's 50% invested in stock funds, 25% in bond funds, and 25% in a money market account at an FDIC-insured bank, the $25,000 in the money market account is covered by the FDIC, but the rest isn't.

CDs sold through brokerage firms, commonly called 澳洲幸运5官方开奖结果体彩网:brokered CDs, may also🍸 have FDIC coverage if the broker purchased the underlying CD from an FDIC-insured bank. (Brokers typically purchase large CDs from banks, then break them up into smaller CD༺s for sale to individual customers.)

Other Types of Retirement Plans and🍌 FDIC Coverage🐈

The FDIC doesn't insure retirement plans as such. But, as mentioned above, certain types of deposits held within a plan may be eligible for coverage.

Not every type of retirement plan account qualifies, however. The list is limited to what the FDIC calls "certain retirement accounts." Those are:

• Individual Retirement Account (IRA)s, including traditional, Roth, 澳洲幸运5官方开奖结果体彩网:Simplified Eᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚmployee Pension (SEP) IRAs, and Savings 🅘Incentive Matc🐭h Plans for Employees (SIMPLE) IRAs.
• Self-directed defined contribution plan accounts, including self-directed 401(k) plans, SIMPLE IRAs held in the form of a 401(k) plan, self-directed defined contribution profit-sharing plans, self-directed Keogh plan accounts (or H.R. 10 plan accounts) designed for self-employed individuals, and Section 457 deferred compensation plan accounts, such as an eligible deferred compensation plan provided by state and local governments, regardless of whether the plan is self-directed.

Types of retirement plans that don't qualify under this definition include 澳洲幸运5官方开奖结果体彩网:defined benefit plans and 澳洲幸运5官方开奖结果体彩网:403(b) plans. Many defined benefit plans are, however, insured up to certain some limits by the federal 澳洲幸运5官方开奖结果体彩网:Pension B𒆙ene🐼fit Guaranty Corporation (PBGC).

The Bottom Line

Most of the assets in 401(k) plans are not eligible for FDIC insurance protection. However, there are otheꦑr🌜 safeguards in place that make 401(k)s relatively safe.