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. Our partner bank is an FDIC-insured institution, and the standard coverage limit is $250,000 per depositor, per insured bank, per ownership category. If you choose your own bank and they are a member of the FDIC, the same coverage will apply.
How coverage is calculated
Coverage follows the name on the account. Your plan's bank account is titled in the name of the plan entity, your IRA LLC, your IRA Trust, or your Solo 401(k) plan trust, so the entity is the insured depositor. That balance is insured in its own right and is not combined with your personal deposits at the same bank.
Cash held at IRA Resources
For IRA LLC and IRA Trust plans, your IRA is held by IRA Resources, which places cash balances with an FDIC-insured depository. Cash at the IRA level is usually temporary, passing through on its way into or out of the plan, and it is insured while it sits there.
Holding more than $250,000 in cash
It is unusual for a balance above $250,000 to sit in cash for long. Plan cash is typically in transit, arriving from a rollover or a sale and moving into the next investment within weeks.
If you do expect to hold a large balance for an extended period, coverage can be extended. Many banks, including our partner bank, participate in IntraFi, a deposit network that spreads a single banking relationship across multiple insured institutions and extends coverage well beyond the standard limit. Contact the bank directly to discuss coverage amounts and how to set that up.
What FDIC insurance does not cover
FDIC insurance responds to one event, the failure of the insured bank. It does not insure against investment loss or market decline, and it is not a general protection against loss of any other kind.
No investment is insured against a decline in value, whether it is held in a self-directed plan or in a conventional brokerage account.
Frequently asked questions
Does coverage apply to both my IRA account and my plan's checking account?
Yes. Each is held in a distinct legal name and is evaluated separately for coverage.
Does FDIC coverage apply to my Solo 401(k)?
Yes. The plan trust is the insured depositor, and its cash is insured on the same terms as any other deposit at an insured institution.
Does FDIC insurance protect me if I make a bad investment?
No. It covers the failure of the bank, not the performance of what your plan bought. If a property declines in value or a private note 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.