How to Protect Your Deposits

Insure your deposits with one banking institution

FDIC Member Banks have access to FDIC insurance for their depositors. The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the US Government created in 1933 to provide stability in the banking system by insuring customers’ bank accounts and other assets. The FDIC insurance covers cash in your checking, savings, money market accounts, and CD’s. While the FDIC covers your monetary investment, it doesn’t cover stocks, bonds, mutual funds, exchange-traded funds, Crypto assets, and safe deposit boxes and their contents.

Deposit Structure can maximize coverage

It is generally thought that this coverage maxes out at $250,000 per depositor. But what if you have more than $250,000 to insure? Did you know you can access millions in FDIC insurance for cash deposits using one trusted financial institution?

FDIC coverage is $250,000 per depositor per ownership category. For example, one person can have an individual account that covers up to $250,000, and a joint account with a spouse for coverage up to an additional $250,000. Contact a local Coulee banker if this applies to you.

ICS and CDARS can also expand FDIC insurance coverage

ICS and CDARS accounts are additional options to increase FDIC insurance coverage. These accounts are considered sweep accounts and are available via the IntraFi network. The ICS sweep option, or demand account, is a checking account or a money market account that does not cap deposits and withdrawals. Demand accounts are best for operational funds that you need to draw on regularly.

The CDARS sweep option is known as a savings sweep account where funds are placed in CDs that limit withdrawals. CDARS sweep accounts are better suited for emergency savings and cash reserves.

You can make deposits at your local bank; these deposits are “shared” with FDIC member banks through the IntraFi network. The deposit is insured using multiple banking institutions that are FDIC approved without having to open separate accounts with multiple banks.

One local bank relationship

Your local Coulee banker can help determine whether an ICS or CDARS account is appropriate for you or if the funds can be insured through multiple ownership categories. Either way, you can feel confident using these systems to maximize your FDIC insurance capabilities.

Deposit placement through CDARS or ICS is subject to the terms, conditions, and disclosures in applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through CDARS or ICS satisfies any restrictions on its deposits.