Deposit protection is the safety net if the bank holding your money fails. For businesses it matters more than for most personal accounts, because balances are larger and a payroll or tax bill can depend on them. The US and UK systems work in similar ways, but they count limits differently for businesses, and fintech accounts add a layer that changes what is covered.
United States: FDIC insurance
The FDIC says its insurance "covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category", and that it "only covers deposits, and only if your bank is FDIC-insured" (FDIC). It "doesn't cover default or bankruptcy of any non-FDIC-insured institution."
Coverage "protects depositors against the failure of an insured bank; it does not protect against losses due to theft or fraud, which are addressed by other laws" (FDIC, Deposits at a glance).
How a business's limit is counted
The FDIC insures deposits by ownership category. For businesses, the relevant one covers corporations, partnerships and unincorporated associations: "All deposits owned by a corporation, partnership, or unincorporated association at the same bank are added together and insured up to $250,000, separately from the personal accounts of the owners or members" (FDIC, Financial products that are insured). The business "must be separately organized under state law and operate primarily for some purpose other than to increase deposit insurance coverage."
Example. A company holds $300,000 at one insured bank, and its owner holds $100,000 personally at the same bank. The company's $300,000 is insured up to $250,000, leaving $50,000 uninsured. The owner's personal $100,000 is insured separately and in full.
Two accounts owned by the same company at the same bank, such as checking and savings, are added together under the company's one limit.
Fintechs and partner banks
Many app-based business accounts are run by technology companies that are not banks. Novo's account page states "Novo is a fintech, not a bank", with banking services from Middlesex Federal Savings, F.A. The deposits sit at the partner bank, which is what the FDIC insures. If the fintech itself failed, FDIC insurance would not cover that event, because the fintech is not an insured bank.
Sweep networks
To go beyond $250,000, some providers spread balances across several banks, each with its own limit:
| Provider | Partner bank | Stated coverage |
|---|---|---|
| Mercury | Choice Financial Group, Column N.A. | Up to $5M |
| Novo | Middlesex Federal Savings | Up to $5M |
| Relay | Thread Bank | Up to $3M |
| Bluevine | Coastal Community Bank | Up to $3M |
| Found | Lead Bank | $250,000 |
A sweep only protects the money that has actually been placed at the program banks. If the business already holds money at one of those banks directly, the two balances count toward the same limit there.
Investment products are separate
Some business apps offer treasury or money market products alongside the checking account. These are investments, not deposits, so FDIC insurance does not apply to them. Mercury, for example, offers a treasury product with a stated yield and describes it as an investment product.
United Kingdom: FSCS protection
The FSCS protects up to £120,000 per eligible person, per bank, building society or credit union, for failures after 30 November 2025. It says it will pay compensation "within seven working days" of a bank failing, and it covers temporary high balances of up to £1.4 million for up to six months (FSCS deposit limit).
Which businesses are covered
The FSCS says: "We generally protect companies' deposits, regardless of the size of the company", though most regulated financial services companies are not eligible (FSCS small business).
How the limit is counted depends on the legal form:
| Business | How the £120,000 applies |
|---|---|
| Sole trader | Business and personal accounts at the same bank are added together under one limit |
| Limited company or LLP | Its own limit, separate from the owners' personal accounts |
| Partnership | Set by the FSCS's eligibility rules; check the specific case |
The FSCS gives the example of "Mr Smith trading as Smith Motors": as a sole trader, he "could claim up to £120,000 in total", not £120,000 for each account.
E-money is different
A UK e-money institution does not take deposits. Under the Electronic Money Regulations 2011, it "must safeguard" customer funds, either by keeping them segregated in a separate account at an authorised bank or the Bank of England, or by covering them with insurance or a comparable guarantee (regulation 20). Safeguarding helps if the firm fails, but it is not insurance, and the FSCS does not cover it. Mettle's fee document says it directly: "Financial Services Compensation Scheme (FSCS) protection does not apply to electronic money institutions."
Some providers offer both kinds of account. Tide, for example, offers an account provided by ClearBank with FSCS protection, while older Tide accounts are e-money with PrePay Technologies. The label on the specific account is what matters.
Side by side
| US (FDIC) | UK (FSCS) | |
|---|---|---|
| Limit | $250,000 per depositor, per bank, per ownership category | £120,000 per eligible person, per firm |
| Companies | Insured separately from owners | Own limit, separate from owners |
| Sole traders | Not set out on the FDIC pages read | Business and personal accounts share one limit |
| Payout | The FDIC "acts quickly" | Within seven working days |
| Fintech or e-money failure | Not covered | E-money safeguarded, not covered |
| Higher balances | Sweep networks across banks | Temporary high balances up to £1.4M for six months |
Checking an account
- Find the legal name of the bank in the account terms or website footer, not the app's brand.
- Check it on the register. In the US, the FDIC's BankFind Suite; in the UK, the FCA Register.
- Look for the wording. "Member FDIC" or "FSCS-protected" signals a bank deposit; "e-money" or "safeguarded" signals the e-money model.
- Add up balances per bank, including money held directly and through any sweep or other app using the same bank.
- Separate investments from deposits. Treasury and money market products are outside deposit insurance.
Comparing accounts
Our US business account comparison and UK comparison name the bank behind every account, and the business account fee calculator compares costs.
Recap
- FDIC insurance covers $250,000 per depositor, per FDIC-insured bank, for each ownership category, against bank failure only.
- A corporation's or partnership's deposits are insured separately from the owners' personal accounts at the same bank.
- Many US fintech accounts sit at partner banks; the partner bank is what the FDIC insures, not the app.
- The FSCS protects up to £120,000 per eligible person, per authorised firm, and says it will pay within seven working days.
- A UK sole trader's business and personal accounts at one bank share a single £120,000 limit; a limited company has its own.
- UK e-money must be safeguarded by law, but the FSCS does not cover it.
Sources
Read on or before 4 November 2026. Rates and rules change; the source page is the current version.
- FDIC fdic.gov
- FDIC, Deposits at a glance fdic.gov
- FDIC, Financial products that are insured fdic.gov
- Novo's account page novo.co
- FSCS fscs.org.uk
- FSCS deposit limit fscs.org.uk
- FSCS small business fscs.org.uk
- regulation 20 legislation.gov.uk
- Mettle's fee document mettle.co.uk
- BankFind Suite banks.data.fdic.gov