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Is My Money Insured? Expanded FDIC coverage...

Is My Money Insured? Expanded FDIC coverage...

February 27, 2024

Last year’s uncertainty in the banking industry is an important reminder for individuals and institutions to take proactive steps to protect capital. As financial advisors, we believe it is essential to understand FDIC insurance coverage and how extended protection for deposit balances over $250,000 can promote safety and confidence.

The FDIC insures traditional bank deposit accounts for up to $250,000 per depositor, per account ownership category, per bank. This means someone with exactly $250,000 in deposits at a single FDIC-insured institution is fully protected against loss if that institution fails. However, many high-net-worth individuals and organizations often have deposit account balances exceeding that amount which would otherwise not be afforded full insurance coverage.

This is where utilizing available solutions to allocate funds across multiple banks and multiple account types to qualify for expanded FDIC protection becomes vital. By distributing up to $2.5 million deposits at separate FDIC-insured institutions under one umbrella, complete insurance coverage on the full amount can be in place even if some of the underlying banks fail. This adds an invaluable layer of security on top of the reassurance that already comes with the FDIC guarantee.

As trusted advisors, it is incumbent on us to understand the way extended FDIC insurance works and to have a solution in place for those who have a need for FDIC insurance beyond the standard $250,000 dollar amount. If this is of concern to you, please feel free to reach out with questions on this topic or any of your other wealth management needs.


~Your Purpose Planning Team