Deposits in deposit accounts with our partner bank Column N.A., Member FDIC have access to FDIC insurance coverage up to $200m.
How is this possible? Doesn’t the FDIC only provide FDIC insurance of up to $250,000?
Our partner bank Column NA, Member FDIC partners with IntraFi Cash Service (ICS) of IntraFi Network LLC — a sweep deposit network — to spread your deposits across their network of 800 banks (list here).
Your deposits may be divided into amounts under the standard FDIC insurance maximum of $250,000 and placed in deposit accounts at banks that participate in the network to expand your FDIC coverage up to $200 million.
What is a sweep network?
A sweep network is an organization that distributes deposits across multiple banks so customers can get higher FDIC deposit insurance coverage. There are several of these networks currently operating within the banking sector. Sweep networks allow you access to expanded FDIC insurance coverage for your deposits, through one banking relationship.
Is IntraFi a legitimate company?
IntraFi Network, LLC, is a privately held firm with a network of financial institutions that has approximately one-third of all U.S. commercial banks and thrifts as members.
IntraFi is the #1 provider of deposit placement solutions and has offered tested, trusted services for more than 20 years. IntraFi’s ICS, CDARS, and IntraFi Sweep services are endorsed by the American Bankers Association, which makes due diligence reports available.
Through economic ups and downs and bank failures, no depositor has ever lost a penny of their funds placed using ICS.
What other companies use sweep networks?
Citi, Robinhood, Wealthfront, Brex, Mercury, and many other large banks and fintech companies work with sweep deposit networks to offer their customers enhanced FDIC coverage.
How are you able to provide access to much higher per depositor FDIC insurance coverage than your competitors?
The FDIC insurance limit you have access to is based on the number of banks in the network you’re enrolled in. Many sweep networks offer $3 million to $5 million in increased FDIC coverage because they work with a smaller number of institutions, while some larger networks – like ICS – with hundreds or thousands of network banks can offer depositors access to hundreds of millions in FDIC insurance.
What happens if I have an account of my funds get swept to a bank where I already have an account?
The maximum insurable amount per depositor per eligible institution is $250,000.
If you already have $250k at a network bank and we place an additional 250k there, that additional 250k wouldn’t be FDIC-insured. Please refer to your Sweep Agreement for more details.
What happens to my deposits if one or more of the 800 banks in the ICS sweep network that my funds are swept out to fail?
Your funds at that institution would be eligible for up to $250,000 in insurance coverage, which would be handled and administered by the FDIC.
Per the ICS agreement you sign at onboarding:
Each participating institution in ICS that is an insured depository institution (“Destination Institution”) will be one at which deposit accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the FDIC standard maximum deposit insurance amount (“SMDIA”) of $250,000.
Subject to the terms and conditions of this Agreement, when we place deposits in a deposit account at a Destination Institution for your funds placed through ICS (“Deposit Account”), the amount of our outstanding placements for you at the Destination Institution through ICS and through CDARS®, the Certificate of Deposit Account Registry Service®, will not exceed $250,000.