FDIC coverage on bank deposits is typically something the average person spends little time contemplating. But as the failure of Silicon Valley Bank from early 2023 demonstrated, this coverage can be a factor that some consider critical in safeguarding cash assets and for peace of mind.
Through this government agency established by Congress, checking and savings account holders at FDIC-insured banks are guaranteed up to $250,000 in coverage — coverage that’s financed by bank-paid insurance premiums. This has become an increasing area of concern, for some individuals, businesses, entrepreneurs, nonprofits and other entities, because it’s not uncommon to have an excess of $250,000 in cash at a given time.
That $250,000 upper limit proved critical to the dozens of customers who saw their cash assets wiped out, billions in all, affecting entities from well-known brands to high-value tech companies to wealthy individuals from the Silicon Valley Bank crisis.
Is my money safe?
The first question to emerge from this crisis is: Are bank failures common? Between 2001 and 2023, 565 banks failed. But it’s important to understand the nuances behind this alarming-sounding statistic. If you check out the line graph on the FDIC’s website, you’ll see how the effects of the housing crisis and the Great Recession inflated this figure. Once you factor in the outlier, figures demonstrate the rarity of bank failures. From 2013 to August 2023, there were 75 bank failures in all.
Learn more about what’s covered and what’s not by reading our blog, All About FDIC Coverage.
Is there an easier way to get FDIC coverage?
Another big question to emerge from this Silicon Valley collapse is: Is there a convenient way to bank that provides sufficient coverage for large cash deposits?
The good news is there’s no need to open multiple checking, savings and CD accounts at different banks to avoid gaps in FDIC coverage. Minnwest Bank is a member of IntraFi Networks, which allows access to Intrafi Cash Sweep (ICS) free to our customers.
Thanks to this network, customers like you gain the ability to do all their banking in one place while maintaining full FDIC protection above and beyond the $250,000 limit. Deposits exceeding $250,000 are parceled out and deposited at other network banks — banks that carry FDIC coverage. Because the cash is physically housed elsewhere, all your cash remains FDIC eligible, but it’s automatically managed through a single financial relationship you know and trust, Minnwest Bank.
To illustrate:
- You deposit $1 million into your Minnwest Bank checking account.
- Minnwest sends $750,000 into the ICS network (assuming a $0 balance at the time of deposit).
- Three participant banks in the network each place a $250,000 parcel in a deposit account.
- Meanwhile, you continue to manage every detail of your deposits and they remain liquid through Minnwest Bank.
Thanks to this network, you need only one login, one statement and you gain full peace of mind that every cent is FDIC covered, even when it goes above the $250,000 threshold.
Minnwest Bank: Helping doers like you
Our offering of Insured Cash Sweep is one way we make sure you get more time back to focus on what matters most. Learn about our suite of cash management tools that streamline your day and help you accomplish more. Book an appointment with one of our helpful cash management specialists today.
