FDIC vs FSCS: what protects a business account, and what e-money and fintech accounts lack
How deposit protection works for business accounts in the US and UK, and what changes when a fintech, partner bank or e-money institution sits in the middle.
Quick answer
In the US, FDIC insurance covers $250,000 per depositor, per insured bank, for each ownership category, and only if the bank fails. In the UK, the FSCS protects deposits up to £120,000 per eligible person, per authorised firm, since 1 December 2025. Neither protects you if a nonbank fintech fails, and UK e-money is safeguarded rather than FSCS-covered.
Key points
- FDIC insurance covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category.
- FDIC insurance covers bank failure; the FDIC says it does not cover a non-FDIC-insured company going bankrupt.
- Many US fintech accounts are held at partner banks; the partner bank is what the FDIC insures.
- Sweep networks spread a balance across banks to raise coverage, to $3M or $5M at some providers.
- The FSCS protects UK deposits up to £120,000 per eligible person, per authorised firm, from 1 December 2025.
- UK e-money is safeguarded by the e-money institution, but the FSCS does not cover it.
Deposit protection is the safety net if the bank holding your money fails. For business accounts it matters more than for most personal ones, because balances are often larger. The US and UK systems work in similar ways, but 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 also says it doesn't cover the "default or bankruptcy of any non-FDIC-insured institution."
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.
Sweep networks
To go beyond $250,000, some providers spread balances across several banks:
| 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 |
United Kingdom: FSCS protection
The FSCS says that from 1 December 2025 it protects up to £120,000 per eligible person, per authorised firm, and covers temporary high balances of up to £1.4 million for up to six months.
E-money is different
A UK e-money institution does not take deposits. It must safeguard customer money, keeping it apart from its own, but 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, so the label on yours matters.
Side by side
| US (FDIC) | UK (FSCS) | |
|---|---|---|
| Limit | $250,000 per depositor, per bank, per category | £120,000 per person, per firm |
| Covers | Deposits at insured banks | Deposits at authorised banks |
| Fintech or e-money failure | Not covered | E-money safeguarded, not covered |
| Raising the limit | Sweep networks across banks | Temporary high balances up to £1.4M |
Checking your own account
Look in your account terms for the bank's legal name, then check it: the FDIC's BankFind in the US, or the FCA Register in the UK. Our US business account comparison and UK comparison name the bank behind every account, and the business account fee calculator compares costs.
Try the numbers
Business account fee calculator, with a page for each market in its own currency and at its own published prices.
The comparisons
Best business bank accounts for sole traders and small firms in the UK (2026)
Four UK business accounts compared on monthly fees, transfer and cash charges, and whether your money is a protected bank deposit.
US editionBest business bank accounts for small businesses in the US (2026)
Six business checking accounts compared on monthly fees, wire and cash charges, and which FDIC-insured bank actually holds the money.
Questions
Is a fintech business account FDIC-insured?
The fintech is not insured; the partner bank holding your deposits is. Mercury, Novo, Relay, Bluevine and Found each name an FDIC-insured partner bank. The FDIC says its insurance covers deposits only at FDIC-insured banks and does not cover the default or bankruptcy of a non-FDIC-insured institution.
How do sweep networks increase FDIC coverage?
A sweep network moves parts of your balance into accounts at several insured banks, so each slice falls under that bank’s $250,000 limit. Providers cite totals such as $3 million at Relay and Bluevine and $5 million at Mercury and Novo. The coverage depends on the money actually being placed across those banks.
What is the FSCS limit for a UK business account?
The FSCS protects eligible deposits up to £120,000 per eligible person, per authorised firm, a limit that rose on 1 December 2025. It also covers temporary high balances of up to £1.4 million for up to six months. Whether a particular business qualifies is set out on the FSCS website, so check it for your own case.
What is safeguarding?
Safeguarding is how a UK e-money or payment institution must protect customer money: keeping it separate from its own funds, for example in a segregated bank account. It helps if the firm fails, but it is not insurance and the FSCS does not cover it, as Mettle’s fee page states for e-money institutions.
Does the same limit apply if I hold money at two brands of one bank?
Often not. Both FDIC and FSCS limits apply per bank or authorised firm, not per brand or app. If two apps use the same partner bank, or two brands share one banking licence, your balances there may count toward a single limit. Check the bank named in each provider’s terms.