Are neobanks FDIC insured? A neobank that is not itself a chartered bank is never FDIC insured; your money is insured only if the company places it in deposit accounts at an FDIC-insured partner bank.
When that is the case, coverage is up to $250,000 per depositor, per insured bank, per ownership category, and it protects you if the bank fails, not if the app company fails. Some neobanks hold their own bank charter and are insured directly.
Last reviewed: October 2026.
Most people asking are neobanks FDIC insured have seen an app that says “FDIC insured” in its marketing and wonder what that really means. This guide explains how the insurance works in the United States, why the word “neobank” tells you nothing about coverage by itself, how pass-through insurance works, what the equivalents are in the UK and EU, and how to check your own account in a few minutes. For the broader safety picture, see our guide on whether neobanks are safe.
Are neobanks FDIC insured, or is it the bank? Who actually holds the cover
The FDIC insures banks, not apps. Its consumer guidance on banking apps is direct: nonbank companies are never FDIC insured, even when they partner with insured banks, and funds you send to a nonbank are not insured until the company deposits them in an insured bank. FDIC insurance also does not cover a nonbank company closing, or money that was never deposited in an insured bank.
In practice, the answer to are neobanks FDIC insured depends on which of three groups a provider falls into:
- It is a bank. The company holds its own charter and is itself FDIC insured. Varo is an example: it received a national bank charter in 2020, according to reporting at the time.
- It partners with a bank. The app is a fintech company and the deposit accounts sit at one or more partner banks. Chime states in its FAQ that it is not a bank and that its accounts are provided by The Bancorp Bank, N.A. and Stride Bank, N.A., with deposits insured through those banks.
- It is not a deposit account at all. Some apps hold your balance as stored value or in a payments account. That money may be safeguarded in some way, but it is not an FDIC-insured deposit.
Our guide on what a neobank does covers these business models in more detail.
How pass-through insurance works
The pass-through rule is the core of the answer to are neobanks FDIC insured. When a fintech pools customer money in a custodial account at a partner bank, the FDIC can treat each customer as the owner of their share. This is called pass-through coverage. A law firm summary of the FDIC rules notes that custodial deposit accounts are generally eligible if they meet certain conditions in 12 C.F.R. Part 330, which is the FDIC’s deposit insurance regulation.
Two points matter for you as a customer:
- The money must really be at the bank. Insurance applies to deposits that exist at an insured bank, not to a promise on the app’s screen.
- Records must show who owns what. Someone, whether the bank or the fintech, has to keep an accurate ledger of each customer’s share. If that ledger is wrong or missing, working out who is owed what becomes slow and uncertain.
The second point is where things went wrong in the Synapse case, described below.
When neobanks are FDIC insured: what is covered and what is not
| Where your money sits | FDIC insured? | What to know |
|---|---|---|
| Neobank with its own bank charter | Yes, directly | Standard limit applies per bank and ownership category. |
| Fintech app with a partner bank | Yes, at the partner bank, if conditions are met | Protects against bank failure, not fintech failure. |
| Payments or stored-value balance | No, unless deposited at an insured bank | Read the terms for how the balance is protected. |
| Stocks, funds, crypto in the app | No | Investment products are outside deposit insurance. |
The FDIC states that deposit insurance covers deposits only, up to $250,000 per depositor, per FDIC-insured bank, for each ownership category. Categories include single accounts, joint accounts, certain retirement accounts and trust accounts. Stocks, bonds, mutual funds, annuities and crypto assets are not covered, even when sold through a bank.
What the Synapse collapse showed
Nothing tests the question are neobanks FDIC insured like a real failure. Synapse was a middleware company that connected fintech apps to partner banks. When it collapsed in 2024, thousands of end users were locked out of their money. Banking Dive reported in September 2026 that, after the partner banks completed a resolution process, thousands of users were still missing as much as $95 million. The CFPB had allocated about $55.2 million in total to repay customers of Yotta and Juno, with no public payout timeline.
The lesson for anyone asking are neobanks FDIC insured is not that pass-through insurance is fake. It is that insurance depends on the partner bank failing, while the Synapse problem was a records and reconciliation failure in the chain between app, middleware and bank. In 2024 the FDIC proposed recordkeeping rules for custodial accounts, with comments due in December 2024. A March 2025 law firm update said the proposal had not been withdrawn, and I could not confirm whether it has since been finalized, so treat its status as something to check.
Equivalents outside the United States
- United Kingdom. The FSCS protects eligible deposits at banks, building societies and credit unions up to £120,000 per person per firm for firms that fail on or after 1 December 2025, and aims to pay within seven working days. E-money and payment firms are different: the FCA states that funds held by them are not directly protected by the FSCS. They must safeguard customer money instead, under stricter rules that took effect on 7 May 2026. Revolut Bank UK was fully licensed in March 2026 and says eligible deposits there are FSCS protected, while some accounts remain e-money accounts that are safeguarded rather than protected. Revolut says you can see which entity you are with in the app’s account details.
- European Union. Deposit guarantee schemes are national, and EU rules require them to protect deposits up to €100,000 per depositor per bank, with payout within seven working days. A single EU-wide scheme has been proposed but is not established.
Whether you ask are neobanks FDIC insured in the US or protected elsewhere, the principle is the same: the protection attaches to a licensed bank deposit, not to the brand name on the app.
Are neobanks FDIC insured in your case? How to check your account
- Find the bank name. Look in the app footer, terms and conditions, or help center for the phrase “banking services provided by” or “Member FDIC.”
- Confirm it in BankFind. The FDIC recommends checking each named bank in its BankFind tool to confirm it is insured.
- Ask the company in writing which bank or banks hold your funds, how and when your money is deposited there, and whether your balance is a deposit or stored value.
- Estimate your coverage. The FDIC’s Electronic Deposit Insurance Estimator (EDIE) shows how much of your balance is insured at a given bank.
- Spread large balances. If you hold more than the limit, split money across different insured banks or ownership categories. Remember that two apps using the same partner bank may count toward one limit.
- Keep your own records. Save statements showing balances so you can prove what you held.
For the trade-offs of using app-based banking more generally, see the disadvantages of neobanks, and if you are comparing providers, our US neobank roundup.
Worked example: two apps, one partner bank
The per-bank limit creates a trap that is easy to miss. Here is an illustrative example with round numbers.
- Maya keeps 180,000 dollars in App A, a fintech whose deposits sit at Example Bank.
- She also keeps 120,000 dollars in App B, a different brand that, unknown to her, also uses Example Bank.
- Both balances are single-ownership accounts in her name, so the FDIC adds them together at Example Bank: 300,000 dollars.
- If Example Bank fails, insurance covers 250,000 dollars. The remaining 50,000 dollars depends on the bank’s liquidation, with no guarantee.
Had App B used a different partner bank, each balance would have had its own 250,000 dollar limit. Therefore, when you ask are neobanks FDIC insured, also ask which bank, because the name of the bank, not the app, decides how limits combine. The FDIC EDIE tool can run this calculation for you once you know the bank names.
Ownership categories: how to protect more than 250,000 dollars
So far we have asked are neobanks FDIC insured at all; the next question is how much. The limit applies per depositor, per bank, per ownership category. Consequently, the same bank can protect more than 250,000 dollars for one household if the money sits in different categories. Single accounts, joint accounts and certain retirement accounts are separate categories under FDIC rules. For example, a joint account owned by two people is insured up to 250,000 dollars for each co-owner, in addition to each person’s single-account coverage at that bank.
Two cautions apply with neobanks. First, not every app offers joint accounts or retirement accounts, so the categories may not be available. Second, a fintech must record the ownership structure correctly for the category to count. If in doubt, open the second category at a different insured bank instead, which is simpler and avoids relying on the app’s records.
Common misconceptions about whether neobanks are FDIC insured
- The FDIC logo in the app means the app is insured. The logo refers to the partner bank. The FDIC says nonbank companies are never insured.
- Insurance pays out if the app goes bankrupt. It pays only if the insured bank fails. The Synapse case showed what happens when the failure sits elsewhere in the chain.
- Every balance in the app is covered. Savings vaults may be deposits, but investment, crypto and rewards balances usually are not.
- Coverage is instant. Money in transit to the bank is not yet a deposit. Read the terms for how long transfers take to settle.
- Insurance protects against fraud. Deposit insurance covers bank failure only. Unauthorised transactions fall under separate consumer protection rules and the provider’s own policies.
For the licence side of the same question, read are neobanks regulated, which explains why a chartered neobank and a partner-bank fintech answer differently.
Frequently asked questions
Is Chime FDIC insured?
Chime says it is not a bank and is not FDIC insured itself. It states that deposits are insured through its partner banks, The Bancorp Bank, N.A. and Stride Bank, N.A. Check Chime’s current help pages, since partner banks can change.
Is my money insured if the neobank itself goes bankrupt?
FDIC insurance responds to the failure of an insured bank, not to the failure of a nonbank app. If the money is held in custodial accounts at an insured bank and the records are sound, you should be able to recover it through the bankruptcy or custodial process, but it can take time, as the Synapse case showed.
What is the FDIC limit for neobank accounts?
The standard maximum is $250,000 per depositor, per insured bank, per ownership category. Joint accounts are insured separately from single accounts at the same bank.
Does FDIC insurance cover crypto or stocks held in an app?
No. The FDIC says stocks, bonds, mutual funds, annuities and crypto assets are not covered, even if offered through an insured bank.
Are UK neobanks covered by the FSCS?
It depends on the legal entity. Eligible deposits at a licensed UK bank are covered up to £120,000 per person per firm. Funds at e-money or payment firms are not directly covered by the FSCS and are safeguarded instead. Check which entity holds your account.
Are European neobanks covered?
Banks licensed in the EU are covered by their national deposit guarantee scheme up to €100,000 per depositor per bank. An e-money institution is not a bank, so check whether your balance is a protected deposit.
More questions on whether neobanks are FDIC insured
How do I know my bank is really FDIC insured?
Search the exact bank name in the FDIC’s BankFind tool. Do not rely on an app’s logo or marketing text alone.
How quickly does the FDIC pay after a bank fails?
The FDIC says it acts quickly after a closure to avoid interrupting access to insured deposits. Exact timing depends on the case and on how complete the account records are.
Are neobanks FDIC insured if they use several partner banks?
Each partner bank carries its own 250,000 dollar limit per depositor and ownership category, provided records identify your share at each bank. Ask the provider how it allocates balances across banks and whether you can see which bank holds your money.
Are savings vaults inside a neobank FDIC insured?
Usually yes if the vault is a deposit at the insured partner bank under your name, and no if it is an investment, rewards or stored-value balance. The product terms state which it is.
Does FDIC insurance protect me from fraud at a neobank?
No. It covers losses only when an insured bank fails. Fraud and unauthorised transactions are handled under consumer protection rules and the provider’s own policies, so read those separately.
Sources and further reading
- FDIC: Banking With Third-Party Apps (June 2024)
- FDIC: Understanding Deposit Insurance
- FDIC: Electronic Deposit Insurance Estimator (EDIE)
- FDIC: BankFind Suite
- Davis Polk: FDIC custodial account recordkeeping proposal (October 2024)
- Banking Dive: Synapse customer reimbursement (September 2026)
- Chime FAQ
- TechCrunch: Varo bank charter (August 2020)
- FSCS: Banks, building societies and credit unions
- FCA: Changes to payment safeguarding rules
- Revolut: Is Revolut now a fully licensed bank in the UK (May 2026 post on the March 2026 licence)
- Deutsche Bundesbank: EU deposit guarantee schemes
This article is general information, not financial or legal advice. Deposit insurance rules, limits and company arrangements change, so check your provider’s current terms and your regulator’s website before relying on coverage.