Cash held at IRA Resources (IRA plans)
For IRA LLC and IRA Trust plans, your IRA account is held by IRA Resources, which uses an FDIC-insured depository for cash balances. Cash held at the IRA level is typically temporary, passing through on its way into or out of your plan. That cash is FDIC insured while it sits there.
Cash held in your plan's bank account
Every plan structure, IRA LLC, IRA Trust, and Solo 401(k), maintains a dedicated bank account in the name of the plan entity. Your cash balance is covered up to $250,000 within an FDIC insured bank account.
What FDIC does not cover
FDIC insurance protects cash deposits against bank failure only. It does not protect against investment loss, market decline, or fraud. No investment, whether held in a self-directed plan or a conventional brokerage, is insured against a loss in value.
Frequently Asked Questions
Does FDIC coverage apply to both my IRA account and my LLC or trust checking account?
Yes. Each account is held in a distinct legal name and qualifies for its own FDIC coverage up to $250,000.
What if my plan holds more than $250,000 in cash?
For short-term cash positions, such as funds in transit before or after an investment, the extra banking work to extend coverage is usually not warranted. If you expect to hold a significant cash balance for an extended period, two practical options are available: distribute the cash across accounts at multiple FDIC-insured banks, or work with a bank that participates in IntraFi (formerly CDARS), which can extend FDIC coverage across a network of banks through a single banking relationship.
Does FDIC coverage apply to my Solo 401(k)?
Yes. A Solo 401(k) plan holds its own bank account in the name of the plan trust. Cash in that account is FDIC insured up to $250,000 at any FDIC-insured institution.
Does FDIC insurance protect me if I make a bad investment?
No. FDIC insurance covers only the risk of bank failure, not investment loss. If a real estate investment declines in value or a private loan defaults, FDIC coverage does not apply.
Does FDIC coverage apply to cryptocurrency held by my plan?
No. Cryptocurrency is not a bank deposit and is not eligible for FDIC insurance under any circumstances.